Pouring Over IFRS - a Case Study on Financial Disclosure in the Wine Industry

Finch, Nigel

doi:10.2139/ssrn.937248

Cited by 1 publication

(1 citation statement)

References 11 publications

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“…Alternatively, firms that did not provide voluntary information and decided to simply meet the minimum disclosure requirements may seek to present a favourable picture to the market. The lack of voluntary disclosures on the IFRS impact on company financial statements and the provision of disclosures that do not go beyond the minimum mandatory required levels indicate that firms are not prepared to assist the users of accounting information in understanding and making judgements about their potential financial limitations and prospects (La Porta et al, 2000;Francis et al, 2005;Finch, 2006). The channel of communication between companies and investors, which is used by investors to construct their expectations about a firm's prospects, would after all be influenced by the costs associated with the related information costs (Gietzmann and Trombetta, 2003).…”

Section: Voluntary Ifrs Disclosures and Value Relevancementioning

confidence: 99%

Voluntary IFRS disclosures: evidence from the transition from UK GAAP to IFRSs

Iatridis

2012

Managerial Auditing Journal

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Purpose -The purpose of this study is to investigate how the provision of voluntary International Financial Reporting Standard (IFRS) disclosures in the pre-adoption period has affected the IFRS transition process of UK listed firms. The study also seeks to identify the motivation of firms with financing needs to provide voluntary IFRS disclosures and determines whether the provision of voluntary IFRS disclosures in the pre-adoption period leads to more value relevant numbers. Design/methodology/approach -The study utilises logistic and linear regressions to test the hypothetical relations set up in the study. The categorisation of firms into voluntary and non-voluntary IFRS disclosers is based on the (non-mandatory) provision of material IFRS information prior to adoption about the upcoming adoption of IFRSs in 2005. Company categorization is particularly based on the construction of an index similar to the disclosure index formulated by the Center for International Financial Analysis and Research. Findings -With regard to IFRS transition, firms that provided voluntary IFRS disclosures prior to adoption display a greater positive change in equity and earnings. Non-voluntary IFRS disclosers exhibit a greater positive change in leverage and a decrease in liquidity. Voluntary IFRS disclosers exhibit higher equity and debt financing needs and tend to be audited by a big auditor and be cross-listed.Research limitations/implications -The study implies that the need to obtain financing on better terms would motivate managers to provide voluntary (IFRS) disclosures to show that they are familiar with the upcoming regulatory change and ready to implement it when it becomes effective. The provision of voluntary IFRS disclosures leads to more value relevant accounting measures, suggesting that less information asymmetry would lead to the disclosure of informative and higher quality accounting information assisting investors in making informed judgements. Originality/value -Knowing about different firms' transition experience would assist accounting standard setters in issuing explanatory IFRS guidance in order to lead to an efficient transition to IFRSs for countries that intend to adopt IFRSs or perform an accounting change. The examination of IFRS transition for firms that have experienced the change is important and would provide insight to firms considering this option. The findings further assist accounting academics and students, accountants and investors in their effort to study the motivation for providing voluntary disclosures as well as the magnitude and materiality of IFRS transition on companies' financial accounts.

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Section: Voluntary Ifrs Disclosures and Value Relevancementioning

confidence: 99%

Voluntary IFRS disclosures: evidence from the transition from UK GAAP to IFRSs

Iatridis

2012

Managerial Auditing Journal

View full text Add to dashboard Cite

show abstract

Pouring Over IFRS - a Case Study on Financial Disclosure in the Wine Industry

Cited by 1 publication

References 11 publications

Voluntary IFRS disclosures: evidence from the transition from UK GAAP to IFRSs

Voluntary IFRS disclosures: evidence from the transition from UK GAAP to IFRSs

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