Acta academica karviniensia 2017, 17(1):76-86 | DOI: 10.25142/aak.2017.007

IFRS 3 COMPLIANCE RESEARCH AT CZECH CAPITAL MARKET

Jiří Pospíšil

Vysoká škola ekonomická v Praze, Fakulta financí a účetnictví, nám. W. Churchilla 1938/4, 130 67 Praha 3, Email:jiri.pospisill@vse.cz

This paper deals with the level of compliance of the financial statements to the disclosure requirements of the IFRS 3 Business Combinations. The analysis was performed on the financial statements of the companies listed in the PX and PX-TR market stock index of the Prague Stock Exchange. Financial statements of the period 2011 to 2014 were included in the research. The level of compliance is assessed through the D-score model which allows for an evaluation of the degree of disclosure in the financial statements. IFRS 3 enumerates the disclosure requirements in the form of list of rather detailed information which are required to be disclosed in the notes of the financial statements in the case that business combination occurred in the reporting period. D-score measures the level of compliance of the analysed financial reports with the list of detailed information prescribed by the IFRS 3. The research showed, that the level of compliance of the analysed financial statements varies between 47 % and 86 %. This paper however does not analyse the determinants that cause low level of compliance nor high level of compliance.

Keywords: Business Combinations, Czech capital market, Degree of disclosure, IFRS 3, Level of compliance

JEL classification: M41

Received: October 21, 2016; Accepted: March 1, 2017; Published: March 30, 2017  Show citation