The impact of IFRS 8 on disclosure practices of Jordanian listed companies

Abstract

PurposeThe purpose of this paper is to compare the segmental information disclosures of Jordanian companies under IFRS 8 for 2009 with disclosures under IAS 14R for 2008.Design/methodology/approachA sample of 109 Jordanian companies is used in this research. A disclosure index checklist was constructed to assess the segmental information provided by the sample companies. In particular, the checklist collected information about: the number of segments reported; the number and type of segmental items published; the geographic segment definitions (areas) used; and the identity of the chief operating decision maker (CODM).FindingsThe results suggest that segmental disclosures under IFRS 8 have increased compared to the information published under IAS 14R. There is an increase in the number of companies disclosing segmental information while the number of business and geographic segments for which information is provided rose under IFRS 8. Items required under the previous standard (IAS 14R) are still being provided in 2009, and the new segmental information required (if reviewed by the CODM) under IFRS 8 is also disclosed. As a result, the total number of segmental items disclosed increased. Moreover, a majority of companies identified the CODM as the chief executive officer.Research limitations/implicationsThis research highlights that the introduction of IFRS 8 has been associated with more Jordanian companies now disclosing segmental information. However, factors other than IFRS 8 may have contributed to the increased disclosure; these are not considered in the current paper.Originality/valueThis research shows that IFRS 8 compliance amongst Jordanian first market companies has resulted in an increase in the number of segments and items per segment disclosed.

Firm Characteristics and Voluntary Segments Disclosure among the Largest Firms in Nigeria

“…Consequently, entities are required to disclose segment reporting which is in line with how managers views the entities based on it's internal report [8]. In Jordan [8] investigates the implementation of IFRS 8 on a sample of 109 Jordanian listed companies using checklist of collected information, and shows that there is an increase in the number of companies publishing segmental information under IFRS 8 than IAS 14.Previous scientific studies have touched on the areas of voluntary segment reporting specific to firm characteristic [9] return on investment, industry type, and profitability are found to be significantly associated with voluntary disclosure thus these variables will be tested to determine the voluntary segment disclosure in the Nigerian corporate atmosphere. Age of the company has been identified in previous studies as an attribute having impact on the quality of accounting practice.…”

“…Therefore, adopting management approach will improve financial reporting process in disaggregating more information which allows users of financial statement to review operations through the eyes of management [7]. Consequently, entities are required to disclose segment reporting which is in line with how managers views the entities based on it's internal report [8] return on investment, industry type, and profitability are found to be significantly associated with voluntary disclosure thus these variables will be tested to determine the voluntary segment disclosure in the Nigerian corporate atmosphere.Age of the company has been identified in previous studies as an attribute having impact on the quality of accounting practice. However company age has been often seen as a proxy for risk [10].…”

Factors affecting financial instruments disclosure in emerging economies: the case of Jordan

“…Large firms typically operate with many administrative and 10 operational units in different parts of the world; thus, the management of such firms needs an advanced internal information system in order to enable the entities to make strategic and operational decisions (Mardini et al, 2012). Since such information already exists for internal purposes, the incremental costs of publicly providing non-proprietary data is thought to be minimal (Ahmad and Nicholls, 1994;Darus et al, 2012).…”

Divulgação De Informações Por Segmento: Panorama Da Aplicação Do CPC 22

“…Estudos relatam que a utilização do SFAS 131 e do IFRS 8, em substituição às normas anteriores, proporcionou melhoria nas informações prestadas pelas empresas pela desagregação de linhas de produtos e também pelo aumento no número de segmentos divulgados (Berger & Hann, 2003;Street, Nichols & Gray, 2000;Ettredge, Kwon, Smith & Stone, 2006;Nichols & Street, 2007;Mardini, Crawford & Power, 2012). No mercado brasileiro, as empresas divulgaram entre um e oito segmentos.…”