The adoption of international financial reporting standards (IFRS) in emerging economies: The case for South Asia

Abstract

Purpose – The purpose of this study is to empirically examine the extent of adoption of International Financial Reporting Standards (IFRS) within three major South Asian countries – India, Pakistan and Bangladesh.

Design/methodology/approach – We selected 566 non-financial listed companies for the financial year 1997–1998. Fifty-two measurement practices and 72 disclosure practices were drawn from 15 commonly adopted IFRS.

Findings – We find that the overall level of adoption of IFRS regarding measurement and disclosure practices is higher in Pakistan compared with India and Bangladesh. We also find that the adoption level is high for inventories, income statement for the period, research and development costs, retirement benefit costs, foreign currency translations, business combination and accounting for investment in associates, whereas the adoption level is low in the areas of cash flow statements, taxes on income, property, plant and equipment, accounting for leases, accounting for government grants, borrowing costs and consolidated financial statements.

Originality/value – Adoption of IFRS issued by the International Accounting Standards Board (IASB) by listed companies has been a subject of immense interest among accounting standard setters, practitioners and academics throughout the world. South Asian countries have adopted IFRS, either fully or with minor modifications, with a view to improving the quality of financial reporting. This article is one of few that examines this important issue and concludes with some suggestions for improving the adoption levels within South Asia.

Citation

Jahangir Ali, M., Ahmed, K. and Eddie, I.A. (2009), "The adoption of international financial reporting standards (IFRS) in emerging economies: The case for South Asia", Tsamenyi, M. and Uddin, S. (Ed.) Accounting in Emerging Economies (Research in Accounting in Emerging Economies, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 1-30. https://doi.org/10.1108/S1479-3563(2009)0000009003