Impact of Changes in Accounting Standards in Debt Ratios of Firms: Evidence in Brazil

ABSTRACT This research investigates the impact of changes in debt ratios of Brazilian firms due to the IFRS adoption. We make a comparison between the forecast of the time-series of debt ratios accounted until 2007 for the span from 2008 to the first quarter of 2015 with those effectively accounted...

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Autores principales: André Aroldo Freitas de Moura, Antônio Carlos Coelho
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PT
Publicado: FUCAPE Business School 2016
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Acceso en línea:https://doaj.org/article/a34c739c8baf496d923ae8ea7e7e4fe5
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spelling oai:doaj.org-article:a34c739c8baf496d923ae8ea7e7e4fe52021-11-11T15:48:06ZImpact of Changes in Accounting Standards in Debt Ratios of Firms: Evidence in Brazil1807-734Xhttps://doaj.org/article/a34c739c8baf496d923ae8ea7e7e4fe52016-01-01T00:00:00Zhttp://www.redalyc.org/articulo.oa?id=123047026002https://doaj.org/toc/1807-734XABSTRACT This research investigates the impact of changes in debt ratios of Brazilian firms due to the IFRS adoption. We make a comparison between the forecast of the time-series of debt ratios accounted until 2007 for the span from 2008 to the first quarter of 2015 with those effectively accounted from 2008 to the first quarter of 2015 derived from the new accounting standard. The research utilizes SARIMAX model and Chow’s (1960) structural break forecast test, controlling for changes originating from the macroeconomic environment as well. We find evidence of significant changes in the debt ratio towards both higher and lower debt with predominance of greater ratios. This result is consistent with past literature in Europe, Australia and New Zealand. Nevertheless, we do not find evidence of a structural break in the Financial Dependency ratio. Moreover, there is no evidence of any distinct effects across different industries. The research provides new evidence confirming the informational effects of IFRS by utilizing a robust time-series model with macroeconomic controls in an innovative approach towards the accounting environment.André Aroldo Freitas de MouraAntônio Carlos CoelhoFUCAPE Business Schoolarticlekeywordsprojection of debt ratiosconvergence to ifrstime seriesbrazilBusinessHF5001-6182ENPTBBR: Brazilian Business Review, Vol 13, Iss 5, Pp 27-50 (2016)
institution DOAJ
collection DOAJ
language EN
PT
topic keywords
projection of debt ratios
convergence to ifrs
time series
brazil
Business
HF5001-6182
spellingShingle keywords
projection of debt ratios
convergence to ifrs
time series
brazil
Business
HF5001-6182
André Aroldo Freitas de Moura
Antônio Carlos Coelho
Impact of Changes in Accounting Standards in Debt Ratios of Firms: Evidence in Brazil
description ABSTRACT This research investigates the impact of changes in debt ratios of Brazilian firms due to the IFRS adoption. We make a comparison between the forecast of the time-series of debt ratios accounted until 2007 for the span from 2008 to the first quarter of 2015 with those effectively accounted from 2008 to the first quarter of 2015 derived from the new accounting standard. The research utilizes SARIMAX model and Chow’s (1960) structural break forecast test, controlling for changes originating from the macroeconomic environment as well. We find evidence of significant changes in the debt ratio towards both higher and lower debt with predominance of greater ratios. This result is consistent with past literature in Europe, Australia and New Zealand. Nevertheless, we do not find evidence of a structural break in the Financial Dependency ratio. Moreover, there is no evidence of any distinct effects across different industries. The research provides new evidence confirming the informational effects of IFRS by utilizing a robust time-series model with macroeconomic controls in an innovative approach towards the accounting environment.
format article
author André Aroldo Freitas de Moura
Antônio Carlos Coelho
author_facet André Aroldo Freitas de Moura
Antônio Carlos Coelho
author_sort André Aroldo Freitas de Moura
title Impact of Changes in Accounting Standards in Debt Ratios of Firms: Evidence in Brazil
title_short Impact of Changes in Accounting Standards in Debt Ratios of Firms: Evidence in Brazil
title_full Impact of Changes in Accounting Standards in Debt Ratios of Firms: Evidence in Brazil
title_fullStr Impact of Changes in Accounting Standards in Debt Ratios of Firms: Evidence in Brazil
title_full_unstemmed Impact of Changes in Accounting Standards in Debt Ratios of Firms: Evidence in Brazil
title_sort impact of changes in accounting standards in debt ratios of firms: evidence in brazil
publisher FUCAPE Business School
publishDate 2016
url https://doaj.org/article/a34c739c8baf496d923ae8ea7e7e4fe5
work_keys_str_mv AT andrearoldofreitasdemoura impactofchangesinaccountingstandardsindebtratiosoffirmsevidenceinbrazil
AT antoniocarloscoelho impactofchangesinaccountingstandardsindebtratiosoffirmsevidenceinbrazil
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