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
Formato:	article
Lenguaje:	EN PT
Publicado:	FUCAPE Business School 2016
Materias:	keywords projection of debt ratios convergence to ifrs time series brazil Business HF5001-6182
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
_version_	1718433908583825408

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

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