Keywords
Hungary
Continental Accounting Model
Individual Financial Statements
Grays Comparability Index
How to Cite
Abstract
IFRS has gradually become the global standard for financial reporting. Hungary adopted IFRS for the individual financial reporting of listed entities in 2017. The objective of this paper is to assess the impacts of IFRS adoption on the individual financial statements of Hungarian listed entities. We study this using a statistical methodology composed of two parts, between the Hungarian Accounting Act (HAA) and the IFRS financial statements. We use a sample of 24 companies listed on the Budapest Stock Exchange (BSE). The first part concerning the Gray’s comparability index was used to assess the degree of conservatism after IFRS adoption. Results showed neutrality for most of the variables, indicating a limited impact of IFRS adoption. The second part, concerning the Wilcoxon signed-rank test, was tested using a subset of variables for 2015, and the complete set of variables for 2016. The results were inconclusive. The 2016 dataset had statistical significance for more favourable IFRS values in numerous variables. Significant findings include differences in profit, return on equity, and solvency ratio 2 (liability to equity) at a 10% significance level. However, the 2015 dataset had no statistical significance for any of the variables tested. Consequently, we applied the Holm-Bonferroni method on the 2016 results for further robustness, due to the possibility of interdependence in the variables. The results showed no statistical significance, confirming the findings from 2015. This highlights a methodological complexity overlooked by similar studies, which do not consider controlling for false positives in the results with tests such as the Holm-Bonferroni method. To conclude, the absence of statistical significance for 2015 and 2016 strongly implies a limited initial impact of IFRS on individual financial statements in the case of Hungary.
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