Levels of European business loans are continuously rising since the introduction of the international financial reporting standards (IFRS).
This is according to research about levels of business loans in Europe by investment banking firm Dresdner Kleinwort Wasserstein.
The investment banking firm revealed that business loans, debt and other liabilities came to 16 per cent higher in businesses that reported on the impact of IFRS, compared with companies that have not.
The businesses that complied with IFRS also reported lower net income, with a decrease in three per cent. This shows that IFRS would have a more significant impact on balance sheets than on the profit and loss statement.
Speaking to the Financial Times about business loans, Anthony Carey, partner at RSM Robson Rhodes said much of the attention has been on the potential impact of IFRS on profit and loss, but in many cases "once you strip out the effect of not having to amortise goodwill, this has not been all that great in net terms".
He said what has been significant though has been the increased balance sheet leverage.
IFRS result in higher business loans
IFRS result in higher business loans
Fri, 17 Jun 2005
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