ECONOMY

IFRS spells trouble

July is expected to be especially hot for many listed companies that, after several extensions granted to them by the government, will finally have to publish their first quarter results under the new International Financial Reporting Standards (IFRS). The new financial statements are expected to show a steep drop in profitability and equity capital compared to the old system of accounting, which was based on a 1920 law. The difference is due to costs that can no longer be excluded from the balance sheets and which, until now, were contained in the financial statement as remarks made, in small print, by the accountants. As far as we know, at least 54 listed companies are expected to find their equity capital reduced by over 30 percent; six of them will even show negative equity. «The status of listed companies will be clarified and we will see which are the healthy, growing ones and which have problems,» Alexis Pilavios, head of the Capital Market Commission, told Kathimerini. «We must do away with the auditors’ comments which often are bigger than the financial statement itself.»