University of Oulu

Niclas Hellman, Henrik Nilsson, Milda Tylaite & Derya Vural (2022) The Impact of an IFRS for SMEs-Based Standard on Financial Reporting Properties and Cost of Debt Financing: Evidence from Swedish Private Firms, European Accounting Review, 31:5, 1175-1205, DOI: 10.1080/09638180.2022.2085758

The impact of an IFRS for SMEs-based standard on financial reporting properties and cost of debt financing : evidence from Swedish private firms

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Author: Hellman, Niclas1; Nilsson, Henrik1,2; Tylaite, Milda1;
Organizations: 1Stockholm School of Economics
2University of Oulu
3Uppsala University
4University of Borås
Format: article
Version: published version
Access: open
Online Access: PDF Full Text (PDF, 1.4 MB)
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Language: English
Published: Informa, 2022
Publish Date: 2023-06-19


In 2014, all larger Swedish private firms were required, at short notice, to adopt a new reporting standard (K3) based on IFRS for SMEs (2009 version). Using this shock to the reporting environment, we study the effects of the new reporting standard on groups’ financial reporting properties and cost of debt financing. We find that, following the introduction of K3, private groups exhibit reporting changes consistent with improved accounting quality; their financial statement comparability increases; and their cost of debt declines. Our results suggest that the cost-of-debt decline is related to changes in accounting numbers that are imputed to lending models. Our findings add to the literature on factors shaping private firms’ financial reporting and inform the ongoing discussion on accounting regulation for private firms.

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Series: European accounting review
ISSN: 0963-8180
ISSN-E: 1468-4497
ISSN-L: 0963-8180
Volume: 31
Issue: 5
Pages: 1175 - 1205
DOI: 10.1080/09638180.2022.2085758
Type of Publication: A1 Journal article – refereed
Field of Science: 512 Business and management
Funding: This work was supported by Jan Wallander and Tom Hedelius Foundation and Tore Browaldh Foundation: [Grant Number P19-0199,P2016-0318:1, W19-0017].
Copyright information: © 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (, which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way.