Future Cash Flow Predictability of Non-IFRS Earnings: Australian Evidence

Elisabeth Sinnewe, Jennifer L. Harrison, Albert Wijeweera

    Research output: Contribution to journalArticlepeer-review

    8 Scopus citations

    Abstract

    The global proliferation of reporting non-International Financial Reporting Standards (IFRS) (pro forma) earnings has been subject to academic debate and regulatory reform. This study examines whether non-IFRS earnings contain statistically significant information on future cash flow predictability that could be useful for investors. The study uses data from large Australian listed companies over a six-year period (2006–11) covering three distinctive periods around the global financial crisis (GFC): pre-GFC, GFC and post-GFC. Results based on fixed effects panel estimation methods suggest non-IFRS earnings do exert a significantly positive impact on future cash flow predictability but only during pre-crisis and crisis periods.

    Original languageBritish English
    Pages (from-to)118-128
    Number of pages11
    JournalAustralian Accounting Review
    Volume27
    Issue number2
    DOIs
    StatePublished - Jun 2017

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