The Impact of IFRS on Annual Report Length

The move to the NZ IFRS has been surrounded by complaints of too much information being provided. Thisis not simply a matter of the cost of providing the information, but the possibility of data overload. Dataoverload is an important issue as it impacts information search strategies and decision outcomes. This isrelevant for assessing whether the NZ IFRS has achieved its goals of reducing the cost of financial analysis.This paper develops a model of information processing capacity and then examines the impact of the move tointernational financial reporting by New Zealand listed entities on the quantity of data provided in theirannual reports. Our analysis shows that the annual report length increased for 92% of our sample firms. Theaverage increase in size was 29% above the prior years’ annual report and arose through notes to the accountsand accounting policies. Even after transitional information (e.g. accounting policies and reconciliations) theincrease was 15%.