Effects of the Adoption of IFRS on the Credit Market: Evidence from Brazil

Published on Jun 1, 2018in The International Journal of Accounting
· DOI :10.1016/j.intacc.2018.04.001
Vinícius Simmer de Lima1
Estimated H-index: 1
(USP: University of São Paulo),
Gerlando Augusto Sampaio Franco de Lima8
Estimated H-index: 8
(UIUC: University of Illinois at Urbana–Champaign),
Giorgio Gotti6
Estimated H-index: 6
(UTEP: University of Texas at El Paso)
Based on a sample of approximately 6500 credit ratings and 137,000 loan contracts, this paper analyzes the effects of mandatory IFRS adoption on the Brazilian credit market. We find that the IFRS adoption effects were limited to firms displaying improved accounting information quality at the time of transition, lending support to the notion that economic benefits do not necessarily flow from the publication of financial reports in IFRS but, rather, depend on how earnestly firms adopt the recommended disclosure practices.
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