The Impact of IFRS Adoption on Financial Reporting, Earnings Management and Securitization: The Case of the FT Auto Mobility Securitization Fund

Abstract

International Financial Reporting Standards (IFRS) Adoption of IFRS has brought tremendous changes in the area of financial reporting, risk management & grouped finance. This study investigates the impact of IFRS 9, IFRS 7, and IFRS 10 on Financial transparency, profit to the FT Auto Mobility Securitization Fund, and influence on investors perception of the FT Auto Mobility Securitization Fund. The move to IFRS, however, resulted in higher levels of financial charges due to the expected credit loss model under IFRS 9, which knocked 65% off its consolidated net income. Furthermore, IFRS 7 enhanced the classification and disclosure of significant noncurrent financial instruments, contributing to a 19.4 million MAD increase in cash holdings, which in turn enhances transparency and liquidity.

However, the leverage ratio rose from 8.35 to 8.64, which might alarm investors with concerns over financial risk. Although these movements enhance both financial stability and comparability, they also challenge profitability and capital management. In addition, this paper suggests that steps should be taken to optimize financial structure, strengthen financial communication, and implement regulatory monitoring to reduce the adverse effect of IFRS adoption. By doing so, FT Auto Mobility can leverage the benefits of IFRS while ensuring that investor confidence and market competitiveness are not compromised.