IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia
This study investigates the use of fair value measurement by 228 listed companies in the UK and Australia around the time of adoption of IFRS from 1 January 2005. We test whether within and between country comparability in policy choices (as measured by T indices) has changed in relation to (a) mand...
| Main Authors: | , , , |
|---|---|
| Format: | Journal Article |
| Published: |
Academic Press
2011
|
| Subjects: | |
| Online Access: | http://hdl.handle.net/20.500.11937/29925 |
| _version_ | 1848752940976701440 |
|---|---|
| author | Cairns, D. Massoudi, D. Taplin, Ross Tarca, A. |
| author_facet | Cairns, D. Massoudi, D. Taplin, Ross Tarca, A. |
| author_sort | Cairns, D. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | This study investigates the use of fair value measurement by 228 listed companies in the UK and Australia around the time of adoption of IFRS from 1 January 2005. We test whether within and between country comparability in policy choices (as measured by T indices) has changed in relation to (a) mandatory and (b) optional use of fair value measurement. Mandatory requirements related to financial instruments (IAS 39) and share-based payments (IFRS 2) have increased comparability, with a weaker effect for biological assets (IAS 41). In relation to the optional use of fair value, comparability increased in relation to property (IAS 16) because some companies discontinued fair value measurement. Under IAS 39, the fair value option for other financial assets and other financial liabilities decreased comparability. Options to use fair value in other areas (intangible assets, plant and equipment and investment properties) are not generally taken up, either for on-going measurement or on IFRS adoption (under the ‘deemed cost’ option). The results suggest a conservative approach and/or lack of incentives to use fair value measurement for most companies. Exceptions include some banks and insurance companies (for other financial assets and liabilities) and companies holding investment properties. |
| first_indexed | 2025-11-14T08:16:37Z |
| format | Journal Article |
| id | curtin-20.500.11937-29925 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T08:16:37Z |
| publishDate | 2011 |
| publisher | Academic Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-299252017-09-13T16:07:34Z IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia Cairns, D. Massoudi, D. Taplin, Ross Tarca, A. Between country comparability Within country comparability Fair value measurement Accounting policy choice T index This study investigates the use of fair value measurement by 228 listed companies in the UK and Australia around the time of adoption of IFRS from 1 January 2005. We test whether within and between country comparability in policy choices (as measured by T indices) has changed in relation to (a) mandatory and (b) optional use of fair value measurement. Mandatory requirements related to financial instruments (IAS 39) and share-based payments (IFRS 2) have increased comparability, with a weaker effect for biological assets (IAS 41). In relation to the optional use of fair value, comparability increased in relation to property (IAS 16) because some companies discontinued fair value measurement. Under IAS 39, the fair value option for other financial assets and other financial liabilities decreased comparability. Options to use fair value in other areas (intangible assets, plant and equipment and investment properties) are not generally taken up, either for on-going measurement or on IFRS adoption (under the ‘deemed cost’ option). The results suggest a conservative approach and/or lack of incentives to use fair value measurement for most companies. Exceptions include some banks and insurance companies (for other financial assets and liabilities) and companies holding investment properties. 2011 Journal Article http://hdl.handle.net/20.500.11937/29925 10.1016/j.bar.2010.10.003 Academic Press restricted |
| spellingShingle | Between country comparability Within country comparability Fair value measurement Accounting policy choice T index Cairns, D. Massoudi, D. Taplin, Ross Tarca, A. IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia |
| title | IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia |
| title_full | IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia |
| title_fullStr | IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia |
| title_full_unstemmed | IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia |
| title_short | IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia |
| title_sort | ifrs fair value measurement and accounting policy choice in the united kingdom and australia |
| topic | Between country comparability Within country comparability Fair value measurement Accounting policy choice T index |
| url | http://hdl.handle.net/20.500.11937/29925 |