The Impact of IFRS 15 Adoption on the Financial Performance of JSE-Listed Companies in South Africa
Date
2022
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Witwatersrand, Johannesburg
Abstract
This study investigates whether the adoption of the IFRS 15 standard has influenced the financial performance of firms listed on the Johannesburg Stock Exchange (JSE). The study analysed a sample of 188 firms from 2015 to 2020, using descriptive statistics, correlation and regression analysis to estimate the results. To establish the impact that the IFRS 15 standard has on real returns on equity and return on assets, while controlling other covariates, a Pooled OLS regression and a dynamic panel-GMM analysis were conducted. The IFRS 15 standard was measured as a dummy variable, while the financial performance was measured using accounting measures: Return on Assets (ROA) and Return on Equity (ROE). Endogeneity issues were addressed, and data analysis was performed on an unbalanced panel using the panel pooled OLS and two-step system GMM. The results revealed that the implementation of the IFRS 15 standard in 2018 had a significant impact, either negative or positive, on the financial performance of firms listed on JSE. This suggests that the introduction of new accounting standards impacts the financial performance (ROA, ROE) of companies listed on the JSE
Description
A research report submitted in partial fulfillment of the requirements for the degree of Master of Management in Finance and Investment to the Faculty of Commerce, Law and Management, Wits Business School, University of the Witwatersrand, Johannesburg, 2022
Keywords
Financial performance, IFRS15 adoption, DID model, Macroeconomic factors, JSE. JEL Classification E62, G30, B26, UCTD
Citation
Tchouaken Monkam, Marie Gisele. (2022). The Impact of IFRS 15 Adoption on the Financial Performance of JSE-Listed Companies in South Africa [Master’s dissertation, University of the Witwatersrand, Johannesburg]. WireDSpace. https://hdl.handle.net/10539/39935