The impact of the divergence between IFRS and RAS debt burdens on the value of Moscow Exchange companies

Abstract: Problem. Russian public companies are required to prepare financial statements under both International Fi-nancing Reporting Standards (IFRS) and Russian Accounting Standards (RAS) simultaneously. Differences in the account-ing rules for leases, consolidation, and provisions cause the debt burden of the same company to differ substantially across the two reporting frameworks, creating measurable information opacity. At the same time, the dependence of the impact of this divergence on the market valuation of a company upon its level of leverage remains unstudied. Aim. To establish whether the divergence between debt under IFRS and RAS affects the EV/EBITDA market multiplier of public companies listed on the Moscow Exchange beyond the effect of absolute debt burden, and whether the strength of this effect depends on the company’s own level of leverage. Methods. Using an unbalanced panel of 189 firm-observations across 17 Mos-cow Exchange sectors for 2015–2024, three nested OLS regressions with sector and year fixed effects were estimated; standard errors were clustered by company. An author-developed indicator of the standards divergence, MASK = (IFRS Debt − RAS Debt) / IFRS Assets, was proposed. Robustness was verified on a quarterly sample (169 observations). Results. For companies with low debt burden, the divergence in standards significantly reduces the multiplier (coefficient −49.20; p = 0.055). As debt grows, the penalty weakens: the coefficient of interaction between MASK and leverage is posi-tive (+33.77; p = 0.005). The net discount reaches zero at Debt/EBITDA ≈ 1.46. On quarterly data, the results are repro-duced with increased significance. Conclusions. The market discounts valuations for the reporting divergence primarily among issuers with a simple debt structure, which is consistent with information asymmetry theory. Voluntary disclosure of a reconciliation of the standards, or the convergence of RAS with IFRS, serves as a tool for managing capitalisation.