Effects of Adopting International Financial Reporting Standards: An Empirical Evidence from selected Indian companies

Abstract

This study examines the effects of adopting International Financial Reporting Standards (IFRS), on the financial performance of sample companies of India during pre and post IFRS period of convergence. It was observed that the financial statements of the sample companies were prepared in accordance with the local GAAP initially and later it converged with IFRS. The financial performance of the sample companies was analysed in respect of liquidity, profitability and stability, using eleven financial ratios. The study used Wilcoxon signed rank test, to test the statistical difference in financial ratios, prepared as per both the standards. It is found that among the three sample companies, Wipro Ltd and Infosys Ltd exhibited statistically significant difference in the sample ratios on convergence, whereas, with regard to Dr Reddy’s Laboratories there was no statistically significant difference noticed on convergence with IFRS during pre and post IFRS period