The determinants and effects of the early adoption of IFRS 15:Evidence from a developing country

Figures & data

Table 1. Sample size

Description	2019	2020	Total
Number of companies listed in EGX100	103	103	206
Less, Financial Companies	20	20	40
Subtotal	83	83	166
Less, companies with missing data	4	4	8
No. of firm-year observations	79	79	158

Table 2. Measurement of variables

Variable	Measurement	Previous studies
Dependent Variable
IFRS15	A dummy variable that equalizes to one in the case that the company is early adopting IFRS15, and zero otherwise.	Ebrahim and Abdel Fattah (2015); Fuad et al. (2019).
Independent Variables
BOD	The natural logarithm of the number of board members.	Kusi et al. (2018).
CEODUAL	A dummy variable is equal to one if the CEO and chairman are separate persons, and zero otherwise.	Abdel-Meguid et al. (2014); Soliman et al. (2014); Ebrahim and Abdel Fattah (2015); Elfeky (2017); Nasr and Ntim (2018); Abdel Fattah and Aboud (2020); Abdou et al. (2021)
BIND	The percentage of independent directors on the board to the total number of board members.	Abdel-Meguid et al. (2014) Soliman, and Abd Elsalam (2012) Emile et al.(2014) Wahba (2014) Soliman et al. (2014) Ebrahim and Abdel Fattah (2015) Ibrahim (2016) Agyei-Mensah (2017) Elfeky (2017) El-Bassiouny and El-Bassiouny (2018) Nasr and Ntim (2018) Abdel Fattah and Aboud (2020) Abdou et al. (2021)
BMEET	The natural logarithm of the number of boards’ meetings per year.	Liao et al. (2018) Abdou et al. (2021)
BFEM	The percentage of female directors to total number of board members on the board.	Liao et al. (2018); Abdou et al. (2021);Aladwey et al. (2022)
Control Variables
AGE	The natural logarithm of the number of years from its inception.	Soliman et al. (2014)
AUDIT	A dummy variable that takes the value of one if the firm’s external auditor is one of the Big 4 and zero otherwise.	Abdel-Meguid et al. (2014) Soliman, and Abd Elsalam (2012) Soliman et al. (2014) Elfeky (2017) Nasr and Ntim (2018) Abdou et al. (2021)
ROA	Profit before tax & interest at year end scaled down by total assets at year end.	Agyei-Mensah (2017); Abdel Fattah and Aboud (2020); Aladwey et al. (2022)
SIZE	The natural logarithm of net sales at year end.	Ebrahim and Abdel Fattah (2015)
LEV	The total debt relative to the total assets at year end.	Soliman, and Abd Elsalam (2012) Soliman et al. (2014) Wahba (2014) Shahwan (2015) Aboud and Diab (2018) Nasr and Ntim (2018) Abdou et al. (2021) Abdel Fattah and Aboud (2020).

Table 3. The early adoption of IFRS15 according to the different industrial sectors and years

Panel A: IFRS15 relevant to the different industrial sectors
IFRS15	No. of Obs.			Percentage
Sector	Not Adopt	Adopt	Total	Not Adopt	Adopt	Total
Basic Resources	18	4	22	82	18	100
Building Materials	13	1	14	93	7	100
Contracting & Construction Engineering	5	1	6	83	17	100
Education Services	3	1	4	75	25	100
Energy & Support Services	2	0	2	100	0	100
Food, Beverages and Tobacco	10	2	12	83	17	100
Health Care & Pharmaceuticals	8	0	8	100	0	100
IT, Media & Communication Services	12	0	12	100	0	100
Industrial Goods, Services and Automobiles	5	1	6	83	17	100
Paper & Packaging	2	0	2	100	0	100
Real Estate	39	3	42	93	7	100
Shipping & Transportation Services	4	2	6	67	33	100
Textile & Durables	8	2	10	80	20	100
Trade & Distributors	4	0	4	100	0	100
Travel & Leisure	4	2	6	67	33	100
Utilities	1	1	2	50	50	100
Total	138	20	158	87.34	12.66	100
Panel B: IFRS15 relevant to the sample period
IFRS15	No. of Obs.			Percentage
Year	Not Adopt	Adopt	Total	Not Adopt	Adopt	Total
2019	74	5	79	93.67	6.33	100
2020	64	15	79	81.01	18.99	100
Total	138	20	158	87.34	12.66	100

Table 4. Descriptive statistics

Panel A: Summary Statistics for Continuous Variables
Variable	Obs	Mean	Std. Dev.	Min	Max
BOD	158	2.1	0.3	1.4	2.7
BIND	158	21.4	16.2	0	86.7
BMEET	158	1.9	0.6	0.7	3.1
BFEM	158	11.6	10.5	0	50
AGE	158	3.3	0.7	0.7	5.1
ROA	158	0.2	1.1	−5.4	6.7
SIZE	158	13.5	2.3	6.7	17.7
LEV	158	7.9	62.9	0	559.6
Panel B: Summary Statistics for Dummy Variables
Variable	Obs	Value	Frequency	Percent
IFRS15	158	0	138	87.34
		1	20	12.67
CEODUAL	158	0	86	54.43
		1	72	45.57
AUDIT	158	0	101	63.92
		1	57	36.08

Table 5. Pearson correlation and multicollinearity statistics

	Panel A: Pearson correlation for Continuous Variables								Panel B: Multicollinearity Statistics
	BOD	BIND	BMEET	BFEM	AGE	ROA	SIZE	LEV	VIF	Tolerance
BOD	1								1.26	0.793205
BIND	0.0344 0.6681	1							1.19	0.838059
BMEET	0.0336 0.6748	0.1403 0.0788	1						1.17	0.852811
BFEM	−0.2319* 0.1012	0.1674* 0.0356	−0.0163 0.8385	1					1.11	0.900437
AGE	0.0089 0.1719	−0.1779 0.0253	0.1506 0.0590	−0.0143 0.0590	1				1.22	0.819776
ROA	−0.0495 0.5393	0.1207 0.1333	0.0035 0.9656	0.0260 0.7471	−0.0738 0.3600	1			1.04	0.960408
SIZE	0.3748* 0.0000	0.1136 0.1552	0.2838* 0.0003	−0.0539 0.5015	0.0256 0.7497	−0.1211 0.1321	1		1.36	0.733768
LEV	−0.0632 0.4300	0.0562 0.4829	−0.1051 0.1890	−0.0453 0.5722	0.0377 0.6378	0.0244 0.7620	−0.0976 0.2223	1	1.05	0.956895

Notes: Statistical significance * denote significance at the 5 level

Table 6. Results of logistic regression: co-efficients

	Coef.	Robust Std. Err.	Z	P>|z|
Independent variables
BOD	−6.65	3.22	−2.06	0.04**
CEODUAL	−1.10	1.38	−0.80	0.42
BIND	0.05	0.04	1.48	0.14
BMEET	−0.20	1.32	−0.15	0.88
BFEM	0.18	0.06	2.74	0.01*
Control variables
AGE	2.87	1.33	2.16	0.03**
AUDIT	0.55	2.44	0.23	0.82
ROA	−1.11	1.31	−0.85	0.40
SIZE	0.83	0.50	1.66	0.10***
LEV	0.02	0.01	2.24	0.03**
Constant	−17.94	7.40	−2.43	0.02**
Obs	158
Prob > chi	0.00
Industry-effect	Controlled

Note: Statistical significance: *, **and ***denote significance at the 10, 5 and 1% levels, respectively

Table 7. Additional test: two sample t-test

Sales Revenues	Two-sample t-test		Mean	Std. Err.	Std. Dev.	t-value	p-value
	IFRS15	Not Adopt	40	69	82
		Adopt	31	165	74	0.4610	0.6454
Stock Price	IFRS15	Not Adopt	14.2	1.9	21.8
		Adopt	21.7	6.3	28.4	−1.3618	0.1753
Account Receivable	IFRS15	Not Adopt	14	39	45
		Adopt	62	34	15	0.7439	0.4580
ROA	IFRS15	Not Adopt	0.21	0.09	1.10
		Adopt	−0.28	0.28	1.26	1.8382	0.0680*
Operating Income	IFRS15	Not Adopt	94	18	21
		Adopt	47	24	11	0.9816	0.3278
Profit at year end	IFRS15	Not Adopt	3.22	7.62	8.96
		Adopt	−4.98	1.20	5.37	1.8235	0.0702*
Cost of goods sold	IFRS15	Not Adopt	31	57	67
		Adopt	26	16	72	0.2620	0.7937

Note: Statistical significance: *, **and ***denote significance at the 10, 5 and 1% levels, respectively

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