Analyzing the Effects of IFRS Standard Changes on Bank Balance Sheet Structure and Liquidity Ratios
Keywords:
IFRS 16, IFRS standards, IFRS 15, IFRS 9, liquidity ratios, bank balance sheetAbstract
This study aims to analyze the effects of changes in International Financial Reporting Standards (IFRS), particularly IFRS 9, IFRS 15, and IFRS 16, on the balance sheet structure and liquidity ratios of Iranian banks during the IFRS adoption period. The research is applied in nature and employs an ex post facto design. The statistical population consisted of all banks listed on the Tehran Stock Exchange between 2013 and 2023. Fifteen banks with audited and IFRS-compliant financial statements were purposively selected. Data were collected from official financial reports and the Securities and Exchange Organization database. Dependent variables included balance sheet structure and liquidity ratios (current, quick, and cash ratios), while IFRS adoption served as the independent variable. Panel data regression models were estimated using the Limer and Hausman tests through EViews and Stata software. The results indicated that IFRS adoption had a positive and significant effect on both the balance sheet structure and liquidity indicators of banks. The estimated coefficients for IFRS were positive and significant across all models (ranging from 0.047 to 0.108, with p-values < 0.05). IFRS implementation led to an increase in equity proportion, improvements in current and quick ratios, and higher levels of cash holdings. The R² values ranged between 0.52 and 0.61, reflecting strong explanatory power for the models. The adoption of IFRS standards in the Iranian banking system has enhanced financial transparency, strengthened balance sheet structures, and improved liquidity positions. These findings underscore the necessity of full IFRS alignment for ensuring financial stability and investor confidence.
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Copyright (c) 2025 Reza Sotudeh, Alireza Hirad, Abbasali Haghparast, Hojat Allah Zerehi (Author)
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