Since January 2018, the mandatory adoption of IFRS 9 “Financial Instruments” has introduced a disruptive discipline within the accountability of financial instruments. Breaking radically with the previousIAS 39, the new rules are expected to affect enormously the preparation of financial statements, particularly for the financial entities. For this reason, there is a fervent and increasing debate among Iasb, authorities and academics in order to understand the major effects associated to the employment of the new standard. Accordingly, this paper responds to this issue in a double perspective. First, it analyses the impact of IFRS 9 on the accounting comparability. Second, it investigates the role of legal system as determinant of comparability. This study bases on a sample of 138 banks from 14 European countries covering ex-ante (2015-2017) and ex-post (2018-2020) period of standard implementation. To investigate the (above) aims, this research develops an output-based approach to measure comparability. The findings obtained from an ordinary least squares regression show that our proxy of comparability is significantly and negatively associated with IFRS 9 and significantly and positively associated with the belonging of the same legal system between IFRS 9 compliant entities. Thus, results show that mandatory IFRS 9adoption has reduced accounting comparability. In authors’ view, these findings may be explained in light of the several challenges that the new standard poses to comparability. They refer, for instance, to the discretionary of preparers in business model assessment to classify financial instruments and in measurement of expected losses. Further, the possibility for IFRS entities to adopt IAS 39 or IFRS 9in order to hedge accounting creates inevitably another obstacle to the comparability. In addition, results also show that banks from the same legal system have more comparable accounting numbers. This study is the first empirical research that investigates the effect of the new standard on comparability and extends the development of an output-based measure across IFRS entities. This study may be also of interest for Iasb that has invited academics to investigate the effect of the new standard, also in support of the phase of the Post Implementation Review of the standard.
Keywords: accounting system comparability, IFRS 9, IAS 39
