Mathematical analysis of convergence with principle-based IFRS under separation system of consolidated and non-consolidated financial statements

2014 Fiscal Year Final Research Report

• Project/Area Number: 23530574
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Accounting
• Research Institution: Niigata University
• Principal Investigator: KAI Hisao 新潟大学, 人文社会・教育科学系, 准教授 (10303108)
• Project Period (FY): 2011-04-28 – 2015-03-31
• Keywords: 原則主義 / 規則主義 / 連結先行 / 連単一致 / 連単分離 / IFRS / コンバージェンス / 利害調整

Outline of Final Research Achievements

This study shows some conditions that the separation system does not work to block the effect of principle-based IFRS on non-consolidated financial statements of Japanese companies. IF principle-based IFRS causes to decrease the psychic cost of the manager’s earnings management, investors do not use the consolidated financial statements but use the non-consolidated financial statements that are less vulnerable than the consolidated financial statements. The more easily the parent company manages its earnings using its subsidiary companies, the more effectively the parent-only financial statements coordinate the conflict of interests between managers and stockholders. About these points, this study has made clear rigorously. I have presented these research results at academic congresses and publish them at academic journals.

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