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An examination of voluntary financial instruments disclosures in excess of mandatory requirements by UK FTSE 100 non‐financial firms

Author

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  • Matthew Bamber
  • Kevin McMeeking

Abstract

Purpose - The purpose of this paper is to address “the existing literature gap on the information content of derivatives reporting”. Prior work finds failings in compliance with mandatory reporting requirements in respect of financial instruments and derivative financial instruments. Instead of identifying weaknesses in compliance the paper identifies where firms over‐comply or in other words, where firms voluntarily disclosemorethan they are required and whether this is incremental information or serves another purpose. Design/methodology/approach - The paper reviews the financial instruments disclosures of the FTSE 100 non‐financial IFRS 7 compliant firms. Based on these results, on a case‐by‐case basis the authors address potential causes and rationale for this extra disclosure. Findings - Prior research suggests that it is counter intuitive to argue that firms will provide voluntary disclosure in a mandatory reporting environment because information of this sort tends to be proprietary and competition sensitive, not to mention costly to prepare. However, it is found that firms have voluntarily published information in excess of the requirements and the authors suggest that this extra detail is most commonly associated with a legitimation strategy. Originality/value - In spite of the importance of derivatives usage and management in addition to the increased and often complex reporting requirements, the authors are not aware of any previous study of this type.

Suggested Citation

  • Matthew Bamber & Kevin McMeeking, 2010. "An examination of voluntary financial instruments disclosures in excess of mandatory requirements by UK FTSE 100 non‐financial firms," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 11(2), pages 133-153, September.
  • Handle: RePEc:eme:jaarpp:v:11:y:2010:i:2:p:133-153
    DOI: 10.1108/09675421011069504
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    Citations

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    Cited by:

    1. Abdullah, Azrul Bin, 2018. "Company-specific characteristics and the choice of hedge accounting for derivatives reporting: Malaysian case," SocArXiv npa6v, Center for Open Science.
    2. Abdullah, Azrul & Ku Ismail, Ku Nor Izah, 2017. "Companies’ Characteristics and the Choice of Hedge Accounting for Derivatives Reporting: Evidence from Malaysian Listed Companies," MPRA Paper 90213, University Library of Munich, Germany.
    3. Abdullah, Azrul & Ku Ismail, Ku Nor Izah, 2015. "Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence," MPRA Paper 85026, University Library of Munich, Germany.
    4. Abdullah, Azrul Bin & Ismail, Ku Nor Izah Ku, 2018. "Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence," SocArXiv kxfqe, Center for Open Science.
    5. Hodgdon, Christopher & Hughes, Susan B., 2016. "The effect of corporate governance, auditor choice and global activities on EU company disclosures of estimates and judgments," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 26(C), pages 28-46.
    6. Abdullah, Azrul Bin & Ismail, Ku Nor Izah Ku & Isa, Norshamshina Mat, 2018. "Risk Management Committee and Disclosure of Hedging Activities Information among Malaysian Listed Companies," SocArXiv qfw5j, Center for Open Science.
    7. Abdullah, Azrul & Ku Ismail, Ku Nor Izah & Mat Isa, Norshamshina, 2015. "Risk Management Committee and Disclosure of Hedging Activities Information among Malaysian Listed Companies," MPRA Paper 77962, University Library of Munich, Germany.
    8. Azrul Abdullah & Ku Nor Izah Ku Ismail & Norshamshina Mat Isa, 2015. "Risikomanagement-Ausschuss und Offenlegung von Hedging-Aktivitäten Informationen unter Malaysian gelisteten Unternehmen [Risk Management Committee and Disclosure of Hedging Activities Information A," Post-Print halshs-01509153, HAL.

    More about this item

    Keywords

    Financial reporting; Disclosure;

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