Abstract:
The IFRS convergence is an excellent decision to be in line with the global
trend to enable a common language for financial reporting process. Due to this
major breakthrough, companies in Sri Lanka can now enjoy a common, high
quality and internationally accepted set of accounting and financial reporting
standards. The convergence with the internationally accepted standards is also
seen as an initiative to bring in ‘more credibility’ to financial reporting in the
country. This study mainly focused on the Impact of IFRS Convergence on
Impairment of Trade Receivables in financial companies in Sri Lanka. The
pre-test and post-test methodology was applied to make a comparison between
before and after the implementation of IFRS, and then to identify its impact
on Impairment of Trade Receivables. Since most of finance companies
undergo this matter as a major issue, the study is significant in evaluating the
impact of IFRS Convergence, and find out any feasible solution for this issue.
The findings showed that IFRS convergence negatively affect the companies’
impairment of trade receivables. Further it specifies that new transformation
of accounting policies badly influence the key performance indicators,
demonstrating that the investors should be attentive in the risk allied with trade
debtors.
