African Journal of Business, Economics and Management
Research Article
• Open Access
The Evolution of IFRS in Emerging Financial Markets: A Multi-year Assessment of Commercial Bank of Ethiopia
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This study examines the multi-year evolution and effectiveness of International Financial Reporting Standards (IFRS) implementation at the Commercial Bank of Ethiopia (CBE) from 2018 to 2025. As Ethiopia’s largest state-owned bank, CBE’s transition from historical cost accounting to a substantive IFRS framework serves as a critical indicator of the nation’s financial reporting maturity. Using an explanatory sequential mixed-methods approach, the research analyzes the degree of substantive compliance, the financial impact of the IFRS 9 Expected Credit Loss (ECL) model, and the institutional barriers hindering full evolution. Quantitative results from a longitudinal analysis of annual reports show a significant upward trend in transparency, with the IFRS Disclosure Index rising from an initial 58% to 89%. Regression analysis confirms that investments in IT infrastructure and professional staff competency are significant predictors of reporting quality and fair value measurement accuracy. However, the shift to IFRS 9 has introduced increased earnings volatility and higher loan loss provisions due to the subjective nature of forward-looking economic indicators in the Ethiopian context. Qualitative findings further reveal that "knowledge asymmetry" with regulators and conflicts.
Keywords
International Financial Reporting Standards, Commercial Bank of Ethiopia, Financial Instruments, Expected Credit Loss, Disclosure Transparency, And Regulatory Pressure.References
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