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Article: An International Exploration of Financial Reporting Practices in the Real Estate Industry Author: Robert Edelstein, Steve Fortin, Desmond Tsang Start Page: 347 Abstract: The adoption of the new International Financial Reporting Standards (IFRS), by allowing the option of fair value accounting for real estate investment properties, has dramatically altered the landscape of financial reporting for real estate firms worldwide. In this exploratory study, by examining the financial statements and disclosures of 45 international real estate firms, we demonstrate that the implementation of IFRS has affected financial reporting practices in the real estate industry. We find that under the IFRS, companies place emphasis on market asset valuations, vis-à-vis alternative metrics for current performance. We also find that most real estate firms in our sample choose to report fair values for investment properties in their financial statements rather than the notes to the financial statements. Finally, there is a wide variation in firm disclosures with regards to the determinants of fair market values. Keywords International Real Estate; Investment Properties; Performance Measurement; International Financial Reporting Standards (IFRS); Fair Value Accounting
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