The impact of introducing estimates of the future on international comparability in earnings expectations

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The impact of introducing estimates of the future on international comparability in earnings expectations

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Title: The impact of introducing estimates of the future on international comparability in earnings expectations
Author: Dargenidou, Christina
McLeay, Stuart
Citation: European Accounting Review, Vol. 19, Issue 3, 2010, p.511-534
Publisher: Routledge
Journal: European Accounting Review
Date Issued: 2010
URI: http://hdl.handle.net/10036/3407
DOI: 10.1080/09638180.2010.496550
Links: http://xfi.exeter.ac.uk/workingpapers/0908.pdf
Abstract: The objective of this paper is to assess whether the inclusion of improved estimates of the future in corporate annual financial statements has brought about greater international comparability. It is argued that including more relevant information in financial reporting enables users to estimate earnings that are more able to reflect current economic conditions and up-to-date expectations of the future and thus recognize news in a more timely manner. To reflect the underlying economics of integrating financial markets, earnings expectations must be not only more timely but also more comparable. Thus, in examining the increasingly widespread adoption of International Financial Reporting Standards, this study considers both the timeliness and the comparability of earnings expectations in the European Union, before and after the mandatory IFRS implementation. The empirical findings support the view that users’ earnings estimates have indeed become more timely in recognizing market news and significantly more comparable.
Type: Article
Description: Working paper; final version published in European Accounting Review; available online at http://www.tandfonline.com/
Keywords: earnings forecastscomparabilitytimelinessinternational financial reporting standardsmeasurement bases
ISSN: 0963-8180


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