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Inhaltsverzeichnis

Frontmatter

1. Introduction

Abstract
Regulation EU No. 1606/2002 requires most listed companies in the European Union (EU) to prepare their consolidated accounts according to International Financial Reporting Standards (IFRS) from fiscal year 2005 onwards (EC, 2002; henceforth the IAS Regulation). This regulation is part of an unprecedented accounting experiment that has seen IFRS reporting being currently mandated in almost 100 countries around the world. Even the US Securities and Exchange Commission (SEC) is actively considering to incorporate IFRS into the financial reporting system for US issuers. Regulators justify the move towards IFRS by the expectation that collective adoption of a single set of global accounting standards will trigger desirable economic consequences in capital markets and at the macroeconomic level. For example, the IAS Regulation explicitly aims „to ensure a high degree of transparency and comparability of financial statements and hence an efficient functioning of the Community capital market and the Internal Market“ (EC, 2002, Art. 1). There is an emerging stream of empirical literature that evaluates whether these objectives have been met. This thesis contributes to this stream of literature by providing three essays on the economic consequences of mandatory IFRS reporting around the world. While the first two essays focus on the response to the adoption process, the third essay analyzes the effects of a subsequent change in IFRS accounting rules.
Ulf Brüggemann

2. Intended and unintended consequences of mandatory IFRS adoption

Abstract
The IAS Regulation (EC, 2002) requires most listed EU firms to prepare their consolidated accounts according to IFRS since 2005. This essay complements an earlier review by Soderstrom and Sun (2007) on voluntary IFRS adoption: We summarize and discuss the extant empirical literature on the economic consequences of mandatory IFRS adoption and provide suggestions for future research.
Ulf Brüggemann

3. The impact of mandatory IFRS adoption on cross-border equity investments of individual investors

Abstract
IFRS reporting is currently accepted in over 100 countries around the world. Regulators justify the move towards IFRS by the expectation that collective adoption of IFRS will enhance transparency and comparability of financial statements across countries and thus, among other benefits, one single accounting language will reinforce cross-border equity investments (e.g., EC, 2002). In this essay, we evaluate this claim by analyzing IFRS-related changes in cross-border equity investments of individual investors.
Ulf Brüggemann

4. The economic consequences of fair value reclassifications under IFRS

Abstract
At the peak of the financial crisis in October 2008, the IASB forwent any regular due process to issue an emergency amendment to IAS 39 in order to relax fair value accounting. These amendments leave banks reporting under IFRS with the choice to retroactively reclassify financial assets that were previously measured at fair value into categories which require measurement at amortized cost, i.e. to effectively abandon fair value accounting for these assets. This decision sharply contrasted the IASB’s general strategy in reporting for financial instruments (IASB, 2008a) and its strong initial position against reclassifications. However, the board eventually surrendered to severe political pressure by the EU Commission and EU leaders, most prominently the French president Nicolas Sarkozy. They repeatedly voiced their concerns about the procyclicality that fair value accounting may introduce and requested to align accounting rules for European banks with those that apply to its US competitors, for which a similar reclassification option already existed under SFAS 65 and 115. In contrast, opponents of easing fair value rules, such as the British Prime Minister Gordon Brown, who stressed that fair values simply reflect current economic reality, went unheeded. This conflict at the top political level in the heat of the financial crisis has been the culmination of a longtime controversial debate in standard setting (e.g. Joint Working Group of Standard Setters, 1999; IASC, 1997) and academics (e.g. Barth, 2006; Landsman, 2007; Ronen, 2008) about the pros and cons of fair value accounting.
Ulf Brüggemann

5. Summary and Conclusions

Abstract
This thesis comprises three essays on the economic consequences of mandatory IFRS reporting around the world. While the first two essays focus on reactions to the adoption process, the third essay analyzes the effects of a subsequent change in IFRS accounting rules.
Ulf Brüggemann

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