The effects of IFRS on net income and equity: evidence from Romanian listed companies

IFRS adoption in Europe represents a major milestone towards financial convergence and Romania, as European member state, had in the last few years a positive reaction towards this process. Starting with year 2012, Romania imposed trough its national regulatory body (the Ministry of Finance) the presentation of individual financial statements according to IERS for 67 Romanian listed companies. The main concern has been to understand the most important differences between national accounting rules and IFRS and how these could affect their reported performance. The goal of the paper is to address this concern by highlighting some empirical evidence of the differences between Romanian accounting regulation and IFRS. These differences are identified in the reconciliation of shareholders' equity and net income of the Romanian listed companies in order to present the significant impacts of the conversion to IERS. The conclusion of this study is that for all 67 companies, presented in our study, the application of IFRS had a small effect on net income and shareholders' equity. (C) 2014 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/).