IFRS Usefulness

Relevance

100

Relevant information helps people make better what?

Decisions 

200

IFRS book values aligns more closely with these

Market values

300

Analysts made fewer mistakes after IFRS. Their accuracy improved by about this percent

15%

400

IFRS made earnings easier for investors to _______ in the future

Predict

500

These became more informative under IFRS, helping stock returns anticipate earnings earlier

Abnormal accruals

Comparability

100

Comparability helps users see similarities and differences between what?

Financial Statements

200

IFRS comparability improved even more in countries with strong what

Enforcement

300

Greater comparability reduces these for investors analyzing firms

Costs

400

Along with full IFRS adopters, these firms also benefitted from increased comparability

Gradual IFRS adopters

500

After IFRS adoption, this key performance metric became closer to U.S. GAAP amounts

Earnings

Information Asymmetry

100

Ghouma et al. (2023) analyze 337 firms drawn from 17 European countries listed on this major European equity index family

STOXX

200

Who benefits from information asymmetry?

The party with an informational advantage

300

When information asymmetry goes down, investors feel more ___________ investing

Comfortable

400

When IFRS reduces information asymmetry, it lowers this cost for companies.

Cost of Equity/Capital

500

Studies show that IFRS adoption narrows this market measure and reduces adverse selection

Bid-ask spread

Transparency/Disclosures

100

IFRS requires companies to give more detailed and complete __________ in their financial reports

Disclosures

200

IFRS 8 makes companies report financial information for each of these parts of the business

Segments 

300

IFRS 7 and IFRS 9 focus on giving more detailed information about this type of company exposure

Risk

400

After adopting IFRS, Ghana’s disclosure quality score increased from about 60% to over this percent

87%

500

The new IFRS 9 credit loss model helps companies recognize losses before bad events happen. What is this type of information called?

Forward-looking information

Analysts' Forecast Accuracy

100

Saudi evidence shows that, after IFRS adoption, analysts’ ________ bias decreased.

Optimism

200

Horton and colleagues used this type of statistical model to test whether IFRS adoption improves analyst forecasts

regression

300

After firms switch from local GAAP to IFRS, analysts’ earnings forecasts become more ________

accurate

400

Chicago research finds that IFRS adoption attracts more of these professionals, especially foreign ones, strengthening market information

Analysts

500

Because more accurate forecasts help investors make better buy-hold-sell choices, they provide stronger decision-________ for users of the FS

Usefulness