Assessing the effect of transition to IFRS on equity - The case of NASDAQ OMX Stockholm

Abstract

This paper examines the effects of transition from Swedish GAAP to international financial reporting standards (IFRS) on big and medium-sized listed companies’ equity in Stockholm NASDAQ OMX. Due to process of worldwide harmonization of accounting standards, the European commission has made reporting according to IFRS compulsory. First annual reports according to IFRS released on 2006 and lots of research had been expected on the effects of this transition. This paper is of this kind of research with the purpose of monitoring the effects of transition to IFRS on equity and balance sheet line items of large and medium –sized listed companies in Sweden. While a general positive trend in equity is documented, the individual changes in balance sheet line items are of particular importance and relevance in the empirical finding section of the research. The contributions of this research- considering its enormous samples- make it a very useful practical guide for Swedish companies who plan to get listed in stock markets and change from Swedish GAAP to IFRS.