Pro forma disclosure practices of firms applying IFRS

Abstract

Purpose – The purpose of this paper is empirically investigate the pro forma disclosure behavior of US-listed foreign firms applying International Financial Reporting Standards (IFRS). Design/methodology/approach – The annual earnings press releases of US-listed foreign firms on the New York Stock Exchange are analyzed to compare the effect that reporting standard (specifically IFRS) has on pro forma disclosure frequency, disclosure characteristics and benchmarking. Findings – US-listed foreign firms applying IFRS report pro forma disclosures more frequently than firms using the USA’s generally accepted accounting principles (GAAP), but less opportunistically. Originality/value – This paper extends Epping and Wilder’s (2011) study and contributes to the pro forma disclosure literature by providing a cross-country analysis of non-GAAP disclosure based on reporting standard (IFRS or US GAAP). Understanding the non-GAAP disclosure of firms applying IFRS is useful to investors and regulators, as more countries adopt IFRS.

Alternative Performance Measures: A Structured Literature Review of Research in Academic and Professional Journals

“…Besides these four determinants, which have already been studied more intensively, a particular focus in the APM literature is also placed on the following determinants: the accounting standards applied such as IFRS accounting in general (Sek and Taylor 2011 ; Solsma and Wilder 2015 ; Shibasaki and Toyokura 2020 ) as well as fair value measurement (Malone et al. 2016 ) and accounting reporting complexity (Brown et al.…”

“…the accounting standards applied such as IFRS accounting in general (Sek and Taylor 2011 ; Solsma and Wilder 2015 ; Shibasaki and Toyokura 2020 ) as well as fair value measurement (Malone et al. 2016 ) and accounting reporting complexity (Brown et al.…”

“…the accounting standards applied such as IFRS accounting in general (Sek and Taylor 2011;Solsma and Wilder 2015;Shibasaki and Toyokura 2020) as well as fair value measurement (Malone et al 2016) and accounting reporting complexity (Brown et al 2020) in particular; K countries' institutional, economic and cultural factors (Isidro and Marques 2015;Visani et al 2020;Bini et al 2020); equity valuation (Badertscher 2011;Hsieh 2010); company-size (Bouwens et al 2019;Bini et al 2020) and other company-specific attributes (Charitou et al 2018;D'Angelo et al 2018); rounding phenomenon (He 2018;Wu et al 2012); media attention (Koning et al 2010); investor sentiment (Brown et al 2012b); managerial reputation (Cheng 2017) and sentiment (Chen 2019); debt covenant violations (Christensen et al 2019); CEO turnover (Jarva et al 2019); analyst coverage (Christensen et al 2021); and the CEO's personal narcissism (Abdel-Meguid et al 2021).…”

IFRS and accounting quality: legal origin, regional, and disclosure impacts

“…The impact of IFRS depends not only on the enforcement mechanisms (Ball et al, 2003;Barth et al, 2008aBarth et al, , 2008bDaske et al, 2008) but also on reporting incentives of firms, which are shaped by a number of institutional factors such as legal system, taxation systems and financing systems of countries (Nobes, 2006(Nobes, , 2013Jeanjean and Stolowy, 2008;Kvaal and Nobes, 2010). Solsma and Wilder (2015) find that US listed foreign firms applying IFRS report pro forma disclosures more frequently than firms using US-Generally Accepted Accounting Principles (GAAP), but less opportunistically. The meta-study by finds an overall positive impact from IFRS adoption, whereas the study by find that accounting quality decreases with IFRS adoption.…”

Measuring the Quality of the Strategic Financial Planning Information (Q-FPI) in the Local Government

“…Consistent representation means data is presented always in the same way and is compactly represented with previous data (Batini & Scannapieca, 2006;Pipino et al, 2002). Regarding financial information, for related items over time, it must follow the same accounting principles and criteria (Cole et al, 2012) and be prepared without judgment (Solsma & Wilder, 2015).…”