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Earnings impact of applying international accounting standard 32 to convertible debt: Some evidence for U.S. firmsJournal of International Accounting, Auditing and Taxation, 6
- Publisher
- Emerald Publishing
- Copyright
- Copyright © 2005 Emerald Group Publishing Limited. All rights reserved.
- ISSN
- 0114-0582
- DOI
- 10.1108/01140580510818594
- Publisher site
- See Article on Publisher Site
Abstract
We assess the impact of NZ IAS 32 on the financial reporting of convertible financial instruments by retrospective application of the standard to a sample of New Zealand companies over the period 1988 ‐ 2003. NZ IAS 32 has a broader definition of liabilities than does the corresponding current standard (FRS‐31) and it does not permit convertibles to be reported under headings that are intermediate to debt and equity. The results of the study indicate that in comparison with the reported financial position and performance, the reporting of convertibles in accordance with NZ IAS 32 would result in higher amounts for liabilities and higher interest. Thus, analysts using financial statement information to assess risk of financial distress will need to revise the critical values of commonly used measures of risk and performance when companies report under NZ IAS
Journal
Pacific Accounting Review – Emerald Publishing
Published: Jul 1, 2005
Keywords: Financial reporting; New Zealand; Accounting standards