The Financial Performance of Selected EU Air Carriers Before and After Introduction of IFRS

Mohamed Abualhaija

The financial performance of European airlines appears to be improving faster under International Financial Reporting Standards (IFRS) when compared with local European Union Generally Accepted Accounting Principles (GAAP). This paper examines how the accounting standards impact the financial performance of the selected EU airlines. Each of the eleven EU airlines operated in European countries and joined the European Union before 2001. The researcher collected data from the financial statements for the years 2001-2008. As the year of IFRS convergence was 2005, the years 2001-2004 represent the pre- IFRS convergence period, and the years 2005-2008 represent the post-IFRS convergence period. The selected profitability indicators were employed to measure the efficiency, productivity, and return on investments for these entities. The resulting data analysis provides evidence that the accounting system does not impact the profitability of the selected airlines.

DOI : https://doi.org/10.21102/graf.2017.03.81.05