Efficient Markets Hypothesis In 2005, all companies in the European Union adopted IFRS, International Financial Reporting Standards. TransTrust NV changed how it accounts for inventory. Taxes are unaffected, although the resulting earnings report released once IFRS had been adopted is 20 per cent higher than what it would have been under the old accounting system. There is no other surprise in the earnings report, and the change in the accounting treatment was publicly announced. If the market is efficient, will the share price be higher when the market learns that the reported earnings are higher?