What is the importance of financial reporting from Local GAAP to IFRS for companies, and how can the accounting treatment influence this factor within firms’ valuation concept?

Abstract

The paper focuses on the accounting treatment under local GAAP and IAS/IFRS and the concepts of companies that are “implementing IFRS” or those “intending to implement IAS/IFRS” with a focus on companies in the food & beverages industry: alcohol-free beverage sector in Greece and worldwide. Financial statements under IFRS are designed to meet the common needs of a wide range of users. Thus, the need to adopt common rules in the preparation and presentation of financial statements becomes imperative, as the advantages are many in comparison with the local GAAP primarily for listed companies and as an alternative for non-listed companies only if they plan to go list. It highlights future developments and challenges (IFRS for SMEs, New Greek Accounting Standards) that could impact on accounting in the industry, mainly SMEs, in the years to come and it puts things in perspective. The results may help to improve the understanding of IFRS adoption success and quality, focusing on listed companies in the Athens Stock Exchange. The findings also suggest that assessing the firm’s financial performance through its financial statements under IFRS is a crucial stage in the financial information used to generate valuations and stock recommendations.