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26 Oct. 2016

IFRS adoption in Australia – are we heading in the right direction?

It has been more than 10 years since Australia adopted IFRS. It is time to ask some big questions: Has IFRS improved the quality of financial reporting in Australia? Has it improved comparability of Australian entities’ financial reporting with their global peers?

As part of a larger IFRS Review project, the AASB has published Research Report No. 3 – The impact of IFRS adoption in Australia: Evidence from academic research, authored by Dr. Nicholas Pawsey from Charles Sturt University, to assist the AASB and Financial Reporting Council to assess the impact of IFRS adoption in Australia. Drawing from high-quality published empirical studies, the report shows that most of the research findings generally support the view that IFRS adoption by for-profit entities has benefited the Australian economy. Studies show that the quality and comparability of financial information has improved since adoption, and investors and analysts can better predict future performance of companies.

Kris Peach, Chair of the AASB, commented: “Adopting IFRS in Australia was a significant step for many entities and sectors. This report is important – it provides empirical evidence that adopting IFRS in Australia continues to be appropriate and has had a positive impact on the Australian economy, particularly for listed entities.”

The AASB in recent months has also conducted nationwide outreach activities to gather views about IFRS from a wide range of stakeholders, including from the for-profit and not-for-profit sectors. The outcomes of this research will inform the AASB on how IFRS should be incorporated into its agenda consultation project and the Australian Reporting Framework in the future.

The report is available at this link.

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