|
The Characteristics of Firms that Early Adopted FRS 10 in the U.K.
Victoria Wang,
National Chung Hsing University
ABSTRACT. Financial Reporting Standard 10 (FRS 10) of the UK mandates companies to adopt capitalisation with systematic amortisation for goodwill accounting from 23 December 1998 onwards, firms are encouraged to early adopt the standard before the mandatory date. The effects of switching from the direct write-off regime to another, capitalisation, is that: it is likely to increase firms’ assets (by recognising the value of goodwill), and thus strengthening their balance sheets. However, their profits would tend to be worsened due to the amortisation expenses. It is therefore the interests of this paper to investigate the motives of those early adopted FRS 10. The study identified 29 early adopters by manually looking into the financial statements of all the listed companies during June 1993 to November 1998, matched by 29 control firms in similar industry, firm size and fiscal year.
Full-Text is no longer available online. Please contact the author(s) for more information about this manuscript.
Back to Session Listing
|