WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 10, 2013
Fair Value Measurement Disclosures in Practice of Companies Listed at London Stock Exchange and Deutsche Börse
Authors: , ,
Abstract: The financial reporting process generating information which is useful in relation to user needs helps companies in becoming more competitive within both the local and global environment. Paper contributes to the body of literature dealing with financial reporting disclosure practices: there is studied the issue of disclosures on fair value measurements in the financial statements. The employed research design imposes the construction of a guide of best practices that is further used in computing a disclosure index. Based on a sample of companies belonging to the financial sector we analyze to which extent they disclose information on fair value measurements used in financial reporting. In order to achieve the objective of this study there was calculated a firm-based disclosure score called a disclosure index. Descriptive analysis and potential correlation between this index and the use of fair value for financial reporting valuations are further investigated. When aiming to clarify professional ethics, we closely analyze integrity based on the latest developments undertaken by European professional bodies. Findings are used in identifying ways to contribute to the endeavor of aligning the profession’s performance with society’s reasonable expectations.
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Keywords: Financial Reporting, measurement, fair value, disclosure index, IFRS 7, professional ethics