Abstract
Beginning in 2008, most Israeli public companies were required to adopt International Financial Reporting Standards (IFRS) for financial reporting. Previously, Israel followed its own set of financial reporting standards, Israeli GAAP, which was very rules-based, in comparison to the more principles-based IFRS. Israel is a highly industrialized country with a significant public company presence in the high-tech, biomedical, healthcare, pharmaceutical, and defense technology industries. Public companies in Israel are regulated by the Israel Securities Authority (ISA). The ISA further oversees the promulgators of Israeli GAAP. IFRS requires a more detailed segment disclosure than Israeli GAAP. Many companies were wary of the amount of segment disclosure required under the new standards. Because of the sensitivity of IFRS-based accounting, especially in regard to fair value and estimation methods, companies found themselves much more cautious in entering into new pension and other legal contracts, such as derivatives and real estate.