The impact of IFRS adoption in a pocket multinational company. The case of Brovedani SPA.

Abstract

Due to globalization, international accounting is becoming increasingly important: even a company, operating within the borders of one country, is no longer isolated from the international accounting features. In the last three decades, a demand for a unique, well-recognized and high-quality international accounting framework has risen attention in order to overcome accounting differences originated by the application of different national GAAPs. After having understood that environment is one of the main causes of these modifications, it is possible to classify accounting systems in order to better understand the problems and solve these differences. International Financial Reporting Standards (IFRS), developed and maintained by the International Accounting Standards Board, is the most famous and used set of international standards, rules and practices: in order to adopt it correctly, there is firstly the need to make uniform all the national environments. Harmonization is, hence, the process of diminishing superfluous or contradictory standards which may have developed autonomously. Obviously, the adoption of IFRS has both beneficial and detrimental effects: academia does not provide a clear answer. In order to shed light regarding this important debate, the concepts analysed in the first more theoretical part are depicted in an Italian medium firm called Brovedani SPA. Established in the north-east of Italy, in fifty years it has become a pocket multinational: working in the automotive sector, it opened factories in Italy, Slovakia and Mexico. Semi-structured questionnaire and simulation helped to access practically the impact of IFRS adoption, from the cultural point of view to the genuine accounting effects.