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The impact of IFRS on net income and equity: evidence from Italian listed companies

Michela Cordazzo (School of Economics and Management, Free University Bozen‐Bolzano, Bolzano, Italy)

Journal of Applied Accounting Research

ISSN: 0967-5426

Article publication date: 24 May 2013




The mandatory conversion to IFRS (International Financial Reporting Standards) has represented much more than a change in accounting rules. Firms’ main concerns have been to understand the extent to which accounting differences between national GAAP and IFRS could affect their reported performance. The purpose of this paper is to address this concern by providing empirical evidence of the nature and the size of the differences between Italian accounting principles and IFRS.


The total and individual differences between Italian GAAP and IFRS are identified and quantified in the reconciliations of net income and equity of companies listed on Borsa Italiana. The focus is to show the major consequences of the conversion to IFRS on accounting outcomes.


The empirical results indicate a more relevant total impact of such a transition on net income than equity. The analysis of individual adjustments shows a greater discrepancy between Italian GAAP and IFRS in the accounting treatment of intangible assets, income taxes, and business combinations with reference to both net income and equity.


The main contribution of the paper is to investigate the impact of mandatory IFRS adoption for Italian listed companies’ financial results. Previous literature does not focus on such a specific country, but it offers a comparative approach to different effects of IFRS on European countries.



Cordazzo, M. (2013), "The impact of IFRS on net income and equity: evidence from Italian listed companies", Journal of Applied Accounting Research, Vol. 14 No. 1, pp. 54-73.



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Copyright © 2013, Emerald Group Publishing Limited

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