IFRS adoption effects in Greece: evidence from the IT sector

Abstract

From January 2005 all the listed firms in the EU member states were required to prepare their financial statements according to the International Financial Reporting Standards – IFRS. In Greece, this transition from Greek GAAP to IFRS may have an effect on firms’ financial results. This study examines the possible impact of adoption of IFRS at Greek firms of the Information Technology (IT) sector, listed on the Athens Exchange. For this reason, the study analyses the financial statements of the sample firms for three years before and after the IFRS adoption in Greece with some ratios. Also, a further analysis is applied in order to estimate the exact influence of IFRS adoption effects in a different time interval and is compared the year 2002 (the year that was firstly announced the IFRS adoption in E.U.) with the year 2005 (the first year of IFRS official adoption on firms’ financial statements). The received results reveiled that, concerning the IFRS adoption effects, compared the year 2002 with the year 2005, as none of the accounting ratios had a statistically significant change due to the IFRS adoption, there is no evidence for a specific impact of the adoption of IFRS on accounting-based information and performance from financial statements at the sample firms. In contrary, in examining the data for the sample firms over a threeyear-period before and after the IFRS adoption, the results revealed that two (EBIT margin; gearing) out of twenty accounting ratios had a statistically significant change and a positive impact due to the IFRS adoption.