Comparability of Cash Flow Statements: Evidence from Baltic Countries

Vaiva Kiaupaite-Grusniene () and Lehte Alver
Additional contact information
Vaiva Kiaupaite-Grusniene: Department of Business Administration, Tallinn University of Technology
Lehte Alver: Department of Business Administration, Tallinn University of Technology

Journal of Accounting and Management Information Systems, 2019, vol. 18, issue 3, 307-329

Abstract: Research Question: Whether the adoption of IFRSs has led to the harmonization and comparability of Baltic listed companies’ cash flow statements? Motivation: Baker and Barbu (2007) have marked that the adoption of IFRSs in EU is the new phase of international harmonization. However, IFRSs still provide flexibility to financial statement preparers when applying the standards due to explicit options, discretion in interpretation and the need for estimates (Wehrfritz & Haller, 2014). Measuring the extent to which financial reports of companies are comparable is an important topic. Our research applies H-index and C-index for measuring harmonization of Baltic listed companies’ cash flow statements. Idea: We examine the problem of harmonization cash flow statements. Data: The sample contains all companies (in total 33) listed on Nasdaq Baltic market for years 2010–2017. Tools: To measure harmonization and comparability of financial reports H-index for each country was found. C-index was used for finding overall, within-country and between-country harmonization. Findings: While there is a longitudinal consistency in classification choice within each company, there is no consistency among the companies in interest received and paid. Dividend treatment is more consistent and harmonized. Users of financial reports should not expect comparability of cash flow statements of Estonian, Latvian and Lithuanian companies, despite the existence of a single stock exchange, cross-border cultural and economic similarities and de jure harmonization of accounting standards. Contribution: This paper contributes to IFRSs impact analysis, and specifically harmonization and comparability literature, by providing comparative results for Estonia, Latvia and Lithuania in financial statement preparers’ classification judgement.

Keywords: accounting; IFRS; accounting policy choice; classification; cash flow (search for similar items in EconPapers)
JEL-codes: G14 M40 M41 M48 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
http://online-cig.ase.ro/RePEc/ami/articles/18_3_1.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ami:journl:v:18:y:2019:i:3:p:307-329

Access Statistics for this article

More articles in Journal of Accounting and Management Information Systems from Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies
Bibliographic data for series maintained by Cristina Tartavulea ().