International Financial Reporting Standards (IFRS) are designed as a common set of language for business affairs so that company accounts could be understandable and comparable across international boundaries. IFRS leads to changes in the financial statement of the company. In order to check whether shareholders’ wealth is affected or not by adoption of IFRS, the present research has been carried out. The objectives of the present paper are to determine the shareholders’ wealth in terms of EVA (absolute and relative) before and after adoption of IFRS for Indian companies and to examine the different components of EVA before and after adoption of IFRS in India. To check the impact, paired data t-test has been administered for testing significance. The results of the study reveal that there is no improvement in EVA and EVA-related financial parameters due to IFRS adoption. For consistency concern, coefficient of variation has also been calculated. The results indicate that consistency in EVA and EVA-related financial parameters is observed after adoption of IFRS. It may also be concluded that the fundamental principle of accounting, i.e., consistency, is supported to a large extent by IFRS adoption.

Today, with the advancement of globalization and integration of capital markets, it has become mandatory for companies to adopt a single language of business, i.e., International Financial Reporting Standards (IFRS). For the purpose, IFRS are designed as a common set of language for business affairs so that company accounts could be understandable and comparable across international boundaries. More than 100 countries around the world have adopted IFRS as their financial reporting system, and in India also, it is mandatory for certain class of companies to prepare the financial statements as per IFRS (IND-AS) from April 1, 2016. Though there are some differences between IFRS and IGAAP due to some local legal requirements and business environment, adoption of IFRS is the need of the hour. The establishment of IFRS is perceived as transparent and fair to local and global investors, which leads to increased compatibility and comparability among different financial statements

Adoption of IFRS, Shareholders’ Wealth, A Study of Select Indian Companies