Impact of IFRS Adoption for Individual Reporting Purposes on the Profit of Hungarian listed Companies

Civic Review· VOL 17. Special Issue, 2021, 187–208., DOI: 10.24307/psz.2021.0014

Viktor Vágner, PhD student, Hungarian University of Agricultural and Life Sciences – Gödöllő, Institute of Business Regulation and Information Management, (This email address is being protected from spambots. You need JavaScript enabled to view it.).


The purpose of this article is to analyze the effects of the mandatory transition to IFRS (International Financial Reporting Standards) in Hungary at the beginning of 2017 (Act CLXXVIII of 2015) on the profits and financial performance of companies listed on the Budapest Stock Exchange. The research assumes a change in accounting regulations that will affect the measurement of results and valuation procedures that will have a significant impact on the financial condition of companies. The method of the analysis is the inverse of the comparability index - originally developed by Gray (1980), which allows the results to be compared between different accounting systems. The calculation of the indexes is based on financial data published in the individual annual reports of the various accounting systems mentioned above for listed companies transitioning to IFRS. The study uses mathematical-statistical calculations to compare the values of the indexes. In connection with the establishment of the study, it was found that there is a significant difference between the results and indicators of the examined companies according to the IFRS and the Hungarian Accounting Standards, of which higher average values can be observed in the case of IFRS.

Journal of Economic Literature (JEL) codes: M41
Keywords: International Financial Reporting Standards, comparability, accounting harmonisation, Hungary, IFRS adoption, Gray index, income statements, earnings management