This paper aims to analyse the changes in accounting surplus (loss), equity and assets, and liabilities as a result of accounting policy changes from the Australian Accounting Standards (AAS) to the International Financial Reporting Standards (IFRS) in Australian local government entities. Using the reconciliation notes disclosed by 117 local government entities, evidence is provided on the effects of IFRS adoption by identifying the key items that of difference between IFRS and AASB. The results show some differences between two sets of accounts prepared under these different accounting standards. While the average surplus (loss) of local councils has decreased, their equities, assets and liabilities have increased, with no major significant changes in their overall financial position, except for liabilities. These results indicate the possible consequences of the adoption of IFRS by local government entities in other countries on performance indicators who have or are yet to implement these standards.



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