"Fair Value Measurement Disclosures: Particularities In The Context Of Listed Companies And European Funding "

Abstract

In the last years and especially after the outbreak of the recent financial and economic crisis, fair value and implicitly fair value measurements for financial statements have been harshly criticized, mainly by the representatives of the companies activating in the financial sector. Therefore, the aim of this paper is to study the issue of disclosures on fair value measurements in the financial statements by firstly sketching a guide of best practices and further focusing on empirically documenting potential determinants. In order to achieve the objective of our study, the employed methodology draws on similar studies in research literature, calculating for each company included in the study a disclosure score called disclosure index and then using a statistical program to run a multivariate linear regression. The obtained results document, among other, that the entity size positively affects the fair value measurements disclosure index. Particularities regarding fair value measurement related disclosures are discussed in the context of European funding (subsidies). Our study therefore contributes (through the developed empirical study) to the literature on the determinants of companies' disclosure practices in the particular area of fair value measurements.

The explanatory factors of disclosures related to the discount rates by listed entities in Portugal

“…The findings are thus in line with the conclusions of Tsalavoutas (2011), which found, in a more crosssectional study on the subject, differences between the levels of disclosures for IAS 19, IAS 36, and IAS 37. It also corroborates, in another perspective, the divergences between the levels of disclosure identified and the different studies that used, individually, the same IAS and IFRS proposed in this study, namely for IFRS 13 (Kasyan et al, 2018;Matiş et al, 2013), IAS 19 (Street & Gray, 2002), IAS 36 (Glaum et al, 2013;Paugam et al, 2013), and IAS 37 (Alnaas & Rashid, 2019).…”

“…Regarding size, the literature is identified in line with the initial propositions, with a predominance of investigations that find a positive association (Ali et al 2004;Alkababji, 2016;Alnaas & Rashid, 2019;Demir & Bahadir, 2014;Devalle & Rizzato, 2013;Guerreiro, 2006;Lopes & Rodrigues, 2007;Matiş et al, 2013;Oliveira & Lemes, 2011;Owusu-Ansah, 1998;Richardson & Welker, 2001;Santos et al, 2014;Singhvi & Desai, 1971;Street & Gray, 2002;Wallace & Naser,1995;Zarzeski, 1996). On profitability, there is research that found a positive relationship (Ali et al, 2004), but also the opposite (Wallace & Naser, 1995).…”

“…The indices are objective evaluation elements, not associated with the quality of the report in general, but with the level of transparency, evaluated by the amount of information disclosed (Urquiza et al, 2009), as used in similar studies in this field, namely Ali et al (2004), Matiş et al (2013), Gray (2002), andTsalavoutas (2011).…”

“…This is also the case for leverage, with studies pointing out to both a positive (Demir & Bahadir, 2014) or a negative association (Guerreiro, 2006;Maia et al 2012;Oliveira et al, 2006;Zarzeski,1996). As for the audit firms, there is, like the size, some consistency as to the positive meaning of the association (Alkababji, 2016;Demir & Bahadir, 2014;Glaum & Street, 2003;Glaum et al, 2013;Lopes & Rodrigues, 2007;Maia et al, 2012;Matiş et al, 2013;Santos et al, 2014;Singhvi & Desai, 1971;Street & Gray, 2002;Tsalavoutas, 2011).…”

The Use of Fair Value Measurement in Financial Reporting: A Literature Review

“…This line of research analyses whether IFRS 13 has improved previous fair value disclosures in financial statements, and whether companies are complying with IFRS 13 in this respect. Matis et al (2013) analyse diversity in fair value disclosures and its determinant factors. They use a sample of 20 companies listed on the London Stock Exchange and the Frankfurt Stock Exchange.…”