ABSTRACT

In May 2014, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) issued a joint standard, which is international financial reporting standard no.15 (IFRS 15), entitled “Revenue from contracts with customers.” This research aims to identify the new standard, illustrate the new recognition model, and determine the impact of measuring revenues following IFRS 15 on the quality of earnings. A quantitative research approach is used, and the absolute value of discretionary accruals and earnings aggressiveness are utilized as proxies for the quality of earnings. The research sample includes three Cambodian-listed companies with 24 firm-year observations over eight years from 2014 to 2021. The study reveals a statistically significant negative effect of the application of IFRS 15 on the quality of earnings of Cambodian-listed companies. The research represents an extension of the previous studies concerned with studying and analyzing the impact of IFRS 15 on the quality of financial statements. It also adds to these studies as there is a lack of quantitative evidence of this new standard’s economic effects after its application date. This study aids professional bodies in determining the impact of adopting international accounting standards on the quality of financial reports of companies in such emerging economies as Cambodia.

Keywords: IFRS 15; Quality of earnings; Absolute value of discretionary accruals; Earnings aggressiveness; Cambodia