The Adoption of IFRS – Impact on Profitability Rate and Tax Income: Evidence from Companies Indonesia Listed in Indonesian Stock Exhange

The Purpose of this study is to examine the impact of the adoption of IFRS on profitability rate and tax income for before and after IFRS adoption in Indonesia Listed Company. By using paired samples t-test, using SPSS 20.0. Results form in descriptive statistics analysis and hypotheses testing. Results show that the average ratio of companies’ profitability is increasing after the adoption of IFRS. The profitability results also show that there is no change in the amount of profit before tax after the adoption of IFRS. IFRS is a set of standards in principles-based that needs full reasoning, clear judgement and deep understanding from its user. Lack of understanding and judgement will indicates that managers have bigger flexibility. Business environment and a fundamentally different situation also determine the form and content of accounting standards. This research is able to give a new paradigm in the adoption of IFRS that needs a comprehensive understanding for its user. Keywords: IFRS, Profitability Rate, Tax Incom