Disclosure Incentives, Mandatory Standards and Firm Communication in the IFRS Adoption Setting

We investigate the content, timing and relevance of firms' narrative disclosure about effects of IFRS adoption in annual statutory financial statements and firm announcements to the stock exchange for 150 large listed Australian firms in the three year period surrounding adoption (which occurred from 1 January 2005). We find that firms with a greater adverse change in earnings (but not equity) on transition provide more disclosure. This relationship is more likely in the transition year for firm announcements and in the adoption year for the statutory accounts, suggesting firms use their public announcements to make complementary and earlier disclosure. We also find the discussion of IFRS impact in both media are value relevant for firms with relatively higher level of disclosure