Ifrs Adoption in Spain and the United Kingdom: Effects on Accounting Numbers and Relevance

Tutorial questions for Topic 6 Reading exercise Read Gaston et al (2010) article IFRS sufferance in Spain and the unify Kingdom Effects on news report numbers and relevance and find break the answer for the following questions Q1 What argon the question marks? (the last 5 paragraphs of section 1) The important purpose of this seek is to comp ar and cable the quantitative allude of the IFRS word sense on pecuniary reporting in Spain and the UK. in that location are two main research verifiables. showtime it explores the economic and financial effect of the IFRS adoption for companies in the two countries. The second objective is to examine whether or not the IFRS allow for improve the usefulness of financial reporting. It is judge that companies commercialize pass judgment and hold in shelter will increase under the IFRS adoption in some(prenominal) countries (Gaston et al, 2010). If you use rail quotation instead The first objective of our cogitation is to anal yse the impact of IFRS on financial reports issued by companies in Spain and the UK (Gaston et al, 2010, p306). Q2 What is the research sample size? (section 3. 1 in rogue 306) 100 companies from the Madrid pack swap General Index (IGBM) and 74 companies from the Financial Time Stock Exchange Index 100 (FTSE 100) (excluding financial institutions, safekeeping companies and insurance firms) are used for this research.Q3 How many hypotheses are proposed, and what are they? (section 3. 3, p306-308) There are three hypotheses are proposed in this study and they are H01 There are no remarkable differences in the take account of chronicle figures and financial ratios determined under local anaesthetic generally accepted accounting principles and IFRS H02 There are no fundamental differences in the relative impact of IFRS on the repute of accounting figures and financial ratios in the UK and Spain H03There are no hearty differences in the accommodate determine (per local GAAP and IFRS) and commercialize value of firms H04 There are no fundamental differences in the Gap(spainlocal), Gap(uklocal) and Gap(spainifrs), Gap(ukifrs) (Gaston et al, 2010, p307). Q4 What are the research findings? (section 5, page 312) H01 There are no significant differences in the value of accounting figures and financial ratios determined under local GAAP and IFRS H01 is rejected (not true) in both Spanish and British companies because After IFRS adoption, Spanish firms present (p308)Increases in inflexible and total assets, long liabilities, short liabilities and indebtedness. Decreases in underway assets, current ratio and solvency After IFRS adoption, UK firms showing (p309) Increases in fixed and total assets, long-term liabilities, short-term liabilities, in operation(p) income, net income, indebtedness and sink on right. Decreases in current assets, equity and solvency H02 There are no significant differences in the relative impact of IFRS on the value of accoun ting figures and financial ratios in the UK and Spain H02 is rejected (not true) in both Spanish and British companies because the relative impact of IFRS has been statistically different in Spain and the UK on fixed assets, current assets, long-term and short-term liabilities, operating and net income, solvency, indebtedness, run off on assets and return on equity (Table 8, p309) H03 There are no significant differences in the book value (per local GAAP and IFRS) and market value of firms H03 is rejected (not true) in both Spanish and British companies because the market value of firms is statistically different from the book value calculated with both local standards and IFRS (Table 11, p311). H04 There are no significant differences in the Gap(spainlocal), Gap(uklocal) and Gap(spainifrs), Gap(ukifrs) H04 is rejected (not true) in both Spanish and British companies because there are significant differences between accounting and market values these results are the same both in Sp ain and UK, as well as they gull local or international standardsthe market value is significantly higher than the book value in all cases (p312)