Using Gray’s (1988) Accounting Values to Explain Differing Levels of Implementation of IFRS

We examine the effect of measurement and disclosure related accounting values on the level of use of IFRS in 42 countries. The decision to undertake the cost associated with replacing current domestic GAAP with a set of foreign constructed accounting standards must be justified with many benefits. These benefits, such as high quality financial statements and increased transparency, are valued differently by countries with differing accounting values. We find empirical support for the hesitancy of countries that value conservatism and secrecy to fully implement IFRS. As an additional test, we use recent data gathered from the IAS Plus website. This more recent test of the effect of measurement and disclosure related accounting values on the level of use of IFRS failed to empirically support the hesitancy of countries that value conservatism and secrecy to require or allow the use of IFRS