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Does the adoption of Ind AS affect the performance of firms in India?

Authors :
Nikhil M. N.
Suman Chakraborty
Lithin B. M.
Lumen Shawn Lobo
Source :
Investment Management & Financial Innovations, Vol 20, Iss 2, Pp 171-181 (2023)
Publication Year :
2023
Publisher :
LLC "CPC "Business Perspectives", 2023.

Abstract

The increasing prevalence of IFRS adoption has resulted in enhanced transparency, accounting quality, and comparability of financial information among firms, especially in emerging markets worldwide, including India. Nonetheless, the question of whether the adoption of IFRS has led to improved firm performance persists. To address this question, this study examines the impact of transitioning from India’s GAAP-based accounting standards to IFRS-converged standards (Ind AS) on non-financial firms’ performance from 2013 to 2022. The empirical findings reveal that the convergence of Indian accounting standards with IFRS significantly improves firm performance, as demonstrated by a positive coefficient of 0.0166 for Ind AS in the fixed-effect model. The study also validates the original empirical findings using the return on equity (ROE) measure of firm performance, which yielded a coefficient of 0.0197, further confirming that the adoption of Ind AS leads to an increase in the performance of Indian firms. These results contribute new insights to the existing IFRS literature and have implications for policymakers and managers.

Details

Language :
English
ISSN :
18104967 and 18129358
Volume :
20
Issue :
2
Database :
Directory of Open Access Journals
Journal :
Investment Management & Financial Innovations
Publication Type :
Academic Journal
Accession number :
edsdoj.f1c370490f3d4a7e95939d369282c917
Document Type :
article
Full Text :
https://doi.org/10.21511/imfi.20(2).2023.15