Eierle, Brigitte and Beckman, Judy and Brandes, Christina (2007) German Reporting Practices: An Analysis of Reconciliations from German Commercial Code to IFRS or US GAAP. Advances in International Accounting 20, pp. 253-294.
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This paper presents the results of research analyzing reconciliations of net income and stockholders’ equity from reports prepared according to Germany's Commercial Code (HGB) to either International Financial Reporting Standards (IFRS) or US Generally Accepted Accounting Principles (US GAAP). We describe the distribution of the reconciling items and assess their value relevance to firm market values 3 months after the financial statement date. The work helps to identify many issues not apparent from research that focuses only on promulgated accounting standards. Among other things, the research presented in this paper demonstrates that, when reconciling to IFRS or US GAAP, German companies must reverse significant software and film licensing revenue. Other areas of significant difference, not surprisingly, show greater conservatism in reporting under HGB than IFRS or US GAAP, particularly in asset capitalizations and write-offs as well as in accruals of provisions and reserves. The latter category is value relevant to the firms’ market values after controlling for all other categories of reconciling items from HGB to either IFRS or US GAAP, indicating that German markets value these companies’ provisions and accruals under the German reporting system.
|Institutions:||Business, Economics and Information Systems > Institut für Betriebswirtschaftslehre > Lehrstuhl für Financial Accounting and Auditing (Prof. Dr. Axel Haller)|
|Subjects:||300 Social sciences > 330 Economics|
|Created at the University of Regensburg:||Yes|
|Deposited On:||18 Mar 2009 12:22|
|Last Modified:||05 Aug 2009 15:52|
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