BusinessCorporate FinanceAnalysts ‘not equipped’ for IFRS

Analysts 'not equipped' for IFRS

Almost half of investment analysts don't feel confident enough to assess the changes that international accounting standards will bring to company accounts, new research has shown.

Link: International Accounting Standards – the basics

Of 100 buy- and sell-side investment analysts interviewed by KPMG, 53% said the introduction of IFRS will have an impact on company valuations, with 35% saying they would mark down companies shares that showed unexplained volatility in earnings.

Only 8% said they felt they know a great deal about IFRS, while 40% of analysts polled said they rated their current knowledge of IFRS as poor.

Mark Vaessen, head of KPMG global IFRS team, said: ‘With 2005 nearly upon us, there is a real concern that the analysts don’t feel equipped to understand the changes brought about by IFRS, and how they will relate to the financial reporters of the companies they track.

‘IFRS won’t change the underlying performance of a business or cash flows, but the markets may not see it that way. Companies must do all they can to keep the investment community in the loop, and set up a regular flow of information on the changes, between now and interim reports next year.’

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