Does IFRS Adoption Reduce Unconditional Accounting Conservatism? Empirical Evidence from the SBF 250

Abstract

The economic and financial transformations observed over the past two decades have profoundly changed the business environment and reinforced the importance of understanding the effects of international accounting standards on reporting practices. In this context, this study examines the impact of adopting IFRS standards on the level of unconditional conservatism among French companies. The analysis is based on an independent market measure, founded on accruals and commonly used to assess unconditional conservatism. The study covers a sample of 80 non-financial companies listed on the SBF 250 index, observed over a ten-year period. Estimates are made using a random effects GLS model, supplemented by a dynamic estimator to limit the risks of potential endogeneity. This approach makes it possible to isolate the specific effect of adopting IFRS on unconditional conservatism. The results show that after adopting IFRS, the level of unconditional conservatism decreases significantly. This finding highlights the effects of fair value on accounting conservatism and raises important implications for investors, regulators, standard setters, and corporate governance.