The impact of IFRS 9 on listed companies in China

Cristiane Benetti (), Joshua Onome Imoniana, Yuqing Cao, Renato Guimaraes and Luciane Reginato
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Cristiane Benetti: ICN Business School, CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine
Joshua Onome Imoniana: USP - Universidade de São Paulo = University of São Paulo
Yuqing Cao: ICN Business School
Renato Guimaraes: ICN Business School, CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine
Luciane Reginato: USP - Universidade de São Paulo = University of São Paulo

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Abstract: With the intensification of world economic integration, IFRS has become more widely used through continuous innovation and reform. It quickly became the goal of the gradual unification of domestic accounting standards. On November 12, 2009, the IASB issued a different version of the former International Financial Reporting Standard for financial assets in accounting operations classification and measurement, namely IFRS 9. With the release of the new standards, many countries have joined the ranks of the gradual international unification of financial reporting standards. As a member of the IASB, China has also taken measures to amend accounting standards to achieve the gradual reunification of different accounting standards. This accounting standard focuses on financial instruments previously implemented in China and is based on IAS 39. This study examines the impact of the implementation of IFRS 9 on the financial statements of listed companies in the People's Republic of China (PRC). So, it raises a research question: What impact does the implementation of IFRS 9 have on the financial reports of listed companies in China? Methodologically, the study employs a mixed approach involving qualitative and content analysis of the data from the financial statements of multiple case studies of five listed enterprises in the PRC during the periods of 2016 and 2017. Results indicate that the impact of available-for-sale financial assets on investment income, other comprehensive income, and comprehensive income is significant. The adjustment of IFRS 9 in financial assets measured at fair value through profit or loss does not cause significant changes in financial data. The IFRS 9 classification model does not substantially affect subsequent measurement and financial results of held-to-maturity investments. Loans and advances can still be measured at amortized cost, and accounts receivable are subject to change at fair value. At the same time, IFRS 9 puts forward certain requirements for the professionalism of IT systems and Chinese accountants. To improve the continuous convergence of IFRS, it is very necessary to track the revision of international accounting standards continuously and closely study the related issues of financial asset accounting. Finally, this study proposes some countermeasures to standard setters and policymakers, and suggestions for domestic accounting standards to further improve international convergence.

Keywords: China; convergency; financial industry; financial instruments; IFRS 9 (search for similar items in EconPapers)
Date: 2024-01-31
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Published in Journal of Accounting and Taxation, 2024, 16, pp.1-14. ⟨10.5897/JAT2023.0584⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04462930

DOI: 10.5897/JAT2023.0584

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