Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/66501
Authors: 
Brauer, Sebastian
Leuschner, Carl-Friedrich
Westermann, Frank
Year of Publication: 
2011
Series/Report no.: 
Working Paper, Institute of Empirical Economic Research, University of Osnabrück 87
Abstract: 
In this paper, we re-evaluate the hypothesis that the introduction of the IFRS has an impact on the timeliness of loss recognition. We test this hypothesis in a data set of public German firms that report according to German-GAAP and IFRS, respectively. The parallel use of the two accounting standards in Germany provides a unique opportunity to contribute to the academic discussion, as well as to the current policy debate on regulatory reform in Germany. Starting from the standard time series concept of conditional conservatism that was initially proposed by Basu (1997), we implement a wide range of test specifications, including (i) a threshold unitroot test specification; (ii) a multivariate approach to outlier detection and (iii) various forms of controlling for fixed effects. We do not find evidence that IFRS and German-GAAP firms differ with respect to their timeliness of loss recognition in any of these specifications - a result that appears surprising in light of the more prudent regulation in the German-GAAP, but is consistent with some earlier findings in the literature.
Subjects: 
IFRS, German-GAAP
Timely loss recognition
Conservatism
JEL: 
M41
M48
C22
K22
Document Type: 
Working Paper

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