Abstract:
Since the world economy is getting globalized, past practices of accounting may not
be able to satisfy the information requirements of global stakeholders. Therefore the
concept of harmonizing the accounting practices has been put forward and realized
by the implementation of International Financial Reporting Standards (IFRS) issued
by International Accounting Standard Board (IASB).The main purpose of this
research is to examine the impact of IFRS adoption on financial ratios in Sri Lankan
listed manufacturing sector companies. The data was collected for the period of eight
years from 2008/2009 to 2015/2016 using annual reports published on listed
manufacturing sector companies. The total sample period is divided to two parts as
pre IFRS and post IFRS for comparison. The ratios which are selected for the analysis
are current ratio, earning per share, debt to equity ratio & return on equity ratio.
The findings of the study suggests that there is no significant difference between the
ratios calculated as per previous accounting standards and after adopting IFRS except
return on equity ratio. Through the impact was not found to be significant for debt
equity ratio and current ratio. These findings would be useful since data used for the
current study is more recent than most IAS or IFRS studies around the world and are
stratified to allow for comparison between voluntary/early adopters and
mandatory/late adopters
