How Does Fair Value Measurement under IAS 39 Affect Disclosure Choices of European Banks?
) (Lehrstuhl für ABWL und Wirtschaftsprüfung/Sonderforschungsbereich 504) Abstract There is a considerable degree of heterogeneity in the way how European banks present their financial instruments in IFRS financial statements. We identify three major presentation formats that are currently applied: a presentation by measurement category, by product, and by purpose. We find the use of the measurement categories, which were originally designed by IAS 39 for measurement purposes, as line items to be the prevalent choice across countries. We analyze the factors that could explain this disclosure choice. We find that a corresponding regulatory recommendation has a strong effect on the choice. We further find that the disclosure of measurement categories is negatively associated with the relative book value of financial assets measured at fair value. This finding suggests discretionary disclosure management by banks. We conclude, based on behavioral theory, that banks expect investors to hav
Related Questions
- What factors affect the price of coins such as the European gold coins? Will they hold their value if gold prices drop?
- How will this affect contracts where the value equals or exceeds EU (European Union)thresholds?
- Does a fair value measurement reflect a reporting entity’s business model or intentions?
