European Real Estate Properties Valuation: Ten Years After Adopting IFRS 13

Miroslav Škoda, Kateřina Bočková, Viera Guzoňová


IFRS 13 had its mandatory implementation on January 1st, 2013. The new accounting standard, which represents one step closer to harmonization between U.S. GAAP and IFRS, aims to eliminate inconsistencies in fair value measurement and its related disclosures through the introduction of new reporting requirements, specifically for assets and liabilities with no active markets. Although these demands also encompass information concerning financial instruments, our focus was on the disclosure changes related to the fair value of investment properties, previously regulated solely by IAS 40. As investment properties comprise the majority of assets in the real estate industry, this sector was further examined. Through a statistical analysis of the sample companies’ annual reports for the periods immediately before and after the implementation of IFRS 13, the purpose of our descriptor-explanatory study was to investigate the level of compliance with IFRS 13 fair value disclosure requirements for investment properties in real estate companies in Europe. In order to answer this question, we first scrutinized the level of compliance with the new disclosure requirements brought up by the standard and then, intermediated by an adaptation of the model developed by Beretta & Bozzolan (2008), measured the disclosure quality for both periods considered. After data collection and analysis, our findings reveal that IFRS 13 does affect the disclosure quality of investment properties in real estate companies in Europe. Overall compliance is very high, while disclosure quality has increased since the implementation of IFRS 13. As a way to further broaden the research related to the more extensive disclosure requirements under IFRS 13, we suggest additional studies be undertaken where the point of view of the real estate companies could be explored. Moreover, it would be interesting to investigate whether the increased number of disclosures, both in relation to quantity and quality, is relevant from an analyst’s standpoint.


Doi: 10.28991/HIJ-2023-04-03-04

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Accounting; IFRS 13; U.S. GAAP; Real Estate; Quality; Disclosure; Statistical Analysis.


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DOI: 10.28991/HIJ-2023-04-03-04


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