First time adoption of IFRS, Fair value option, conservatism: Evidences from French listed companies

Samira Demaria () and Dominique Dufour
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Samira Demaria: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique
Dominique Dufour: CRIFP - Centre de Recherche en Ingénierie Financière et Finances Publiques - UNS - Université Nice Sophia Antipolis (1965 - 2019)

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Abstract: The European Commission set 2005 as the date for the move to IFRS for all companies listed on European stockexchanges. The paper studies the first adoption of IFRS within the perspective of the accounting optionsconcerning the fair value method. The optional standards included in the study are: fair value exemption of IFRS1, IAS 16, 38 and 40. The sample is composed of the firms of the SBF 120 index.The paper pursues two main objectives. Firstly, from an explanatory point of view, French fair value choicesduring the first adoption of the IFRS are presented. The second goal of the article is to reveal the determiningfactors behind those choices. The Positive Accounting Theory (PAT), of which one of the main objectives is toexplain firms' accounting choices, is used as an explanatory background. IFRS choices are linked to thecharacteristics of the firm such as: size, leverage, CEO's compensation, ownership structure, cross-listing andfinancial sector.The statistical analysis uses a logistic regression method to attempt to identify systematic differences betweenfirms adopting fair value and others. This study considers the choice of conservatism as an identified criterionfor explaining fair value choices. The research query can be summed up thus: How the PAT can explain fairvalue accounting options made by French companies during the transition to IFRS standards? The paper isorganized as follows: an overview of IFRS, the literature review, presentation of the sample, the hypothesis, thestatistical method, the results and the discussion

Keywords: IAS/IFRS; first time adoption; accounting choices; positive accounting theory and conservatism.; positive accounting theory and conservatism (search for similar items in EconPapers)
Date: 2007-04
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00266189
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Citations: View citations in EconPapers (12)

Published in 30 ème colloque de l'EAA, Apr 2007, Lisbon, Portugal. 24p

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