A Comparative Study on CAS and IFRS:An Empirical Test Based on the Differences in Income Statements

Abstract

Abstract:

China Accounting Standards (CAS) implemented in 2007 is different from International Financial Reporting Standards (IFRS) in both content of standards and format of income statements. Using A+H cross-listed companies from 2007 to 2014 as samples, this paper empirically compares information content between the two income statements by considering two major differences between them:net profit and profit from operation. The results suggest that net profit and profit from operation before financial income and other investment income in H shares income statements reported according to IFRS are both able to bring incremental information to investors, and investors are mainly concerned with the differences in recognition of revaluation of assets, revenue, fixed assets and devaluation of assets. Meanwhile, the per-sistence of profit from operation before financial income and other investment income reported according to IFRS is higher than that of profit from operation reported according to CAS. The paper provides a theoretical basis for the international convergence of CAS.

Key words: China Accounting Standards, International Financial Reporting Standards, cross-listing, framing effects, earnings persist-ence, event study, incremental information

Zhou Jianan, Jia Qiaoyu. A Comparative Study on CAS and IFRS:An Empirical Test Based on the Differences in Income Statements[J]. , 2018, 30(2): 200-211.

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