IFRS Application and the Comparability of Financial Statements

Abstract

The purpose of this paper is to examine whether the application of IFRS by Japanese firms increases comparability of financial statements with other IFRS firms. I focus on IFRS firms in Japan and pair them with firms that are selected from IFRS firms in the EU member countries and JPN GAAP firms. Two approaches are developed from the definition of “Comparability” in the IASB Conceptual Framework. The results of tests show that the application of IFRS increases the comparability of financial statements among IFRS firms, however it does not decrease comparability with JPN GAAP applying firms.