Analysis of Accounting Conservatism on Accounting Policy Post-Implementation of International Financial Reporting Standard

DOI

10.2991/piceeba-19.2019.3How to use a DOI?

Keywords

Convergence of IFRS,conservatisme, conditional conservatism, unconditional conservatism

Abstract

The study aims to examine the conservatism on accounting policies after Convergence to IFRS in financial reporting of Indonesia. The study was conducted The study was conducted with the population of manufacturing companies listed in Indonesia Stock Exchange. Samples were determined by purposive sampling method, obtained a sample of 7575 firms with 88 yearsof observation (2008-2015). Tests using a panel data and there are 600-year observations enterprise, where data divided into two periods: before and after IFRS. The analysis using Basu Model(1997)developed by Ismail and Elbolok (2011). The model to examine conditional and unconditional conservatism. Additionally,conducted the negative earnings response coefficient model(Basu, 1997, which wasmodified by Ball and Shivakumar, 2005, and Ruddock et al., 2006), and the response coefficient of accruals on the negative versus positive cash flow model by Ball and Shivakumar (2005) modified by Ruddock et al. The resultshows that ex ante conservatism (unconditional conservatism) or also called balance sheet conservatism has decreased. This is because the use of fair value in the statement of financial position, which previously usedhistorical cost. Although fair value not completely eliminate conservatism, because a lot of using the fair value level 2 and 3. In contrast, conservatism ex post (conditional conservatism) is also called income statement increased conservatism. This researchshow that the argument of IFRS uses fair value and the financial statements free from conservatism can be rejected. This study also shows that conservatism at a certain level is still needed because of the contracting efficiency.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Nurzi Sebrina
AU  - Salma Taqwa
PY  - 2019/09
DA  - 2019/09
TI  - Analysis of Accounting Conservatism on Accounting Policy Post-Implementation of International Financial Reporting Standard
BT  - Proceedings of the Third Padang International Conference On Economics Education, Economics, Business and Management, Accounting and Entrepreneurship (PICEEBA 2019)
PB  - Atlantis Press
SP  - 809
EP  - 821
SN  - 2352-5428
UR  - https://doi.org/10.2991/piceeba-19.2019.3
DO  - 10.2991/piceeba-19.2019.3
ID  - Sebrina2019/09
ER  -