Impact of Adopting IFRS Standard on the Equity Cost of Brazilian Open Capital Companies

• Autor(a) principal: Gatsios, Rafael Confetti
• Data de Publicação: 2016
• Outros Autores: da Silva, José Marcos, Ambrozini, Marcelo Augusto, Assaf Neto, Alexandre, Lima, Fabiano Guasti
• Tipo de documento: Artigo
• Idioma: eng; por
• Título da fonte: RAM. Revista de Administração Mackenzie
• Texto Completo: https://editorarevistas.mackenzie.br/index.php/RAM/article/view/8275
• topic: Cost of equity. CAPM. IFRS. Quality of accounting information. Brazil.; Costo de capital de las empresas. CAPM. Adopción de las normas NIIF. Calidad de la información contable. Brasil.; Custo de capital de próprio. CAPM. Adoção do padrão IFRS. Qualidade da informação contábil. Brasil.

Purpose: This study aims to assess the impact of adopting IFRS standard on the equity cost of Brazilian open capital companies in the period of 2004-2013Originality/Gap/Relevance/Implications: The adoption of International Financial Reporting Standards aims to increase the quality of accounting information. Studies for Europe suggest that after the adoption of the IFRS standard there was a reduction in the equity cost of companies due to the reduction of information asymmetry and risk.Key methodological aspects:  The  Equity cost was calculated using the CAPM model (Capital Asset Pricing Model) adapted to the Brazilian case. The empirical strategy was the differences in differences, comparing the results of companies that voluntarily adopted the IFRS with companies that adopted IFRS after the mandatory adoption period.Summary of key results: The results indicate that the adoption of the IFRS standard does not contribute to reduce the equity cost in BrazilKey considerations/conclusions: Suggesting that the process of adopting international accounting standard may take much time to impact the equity cost of Brazilian open capital companies, since the impact of IFRS is not related only with the adoption, but also with its use by companies and users.