Cross-country differences in disclosure quality : a study of fair value disclosures by european real estate companies
Sundgren, Stefan (University of Vaasa)
Mäki, Juha (University of Vaasa)
Somoza López, Antonio (Universitat de Barcelona. Facultat d'Economia i Empresa)
Universitat Autònoma de Barcelona. Departament d'Empresa

Imprint:	Universitat Autònoma de Barcelona. Departament d'Economia de l'Empresa 2013
Description:	48 p.
Abstract:	Companies are under IAS 40 required to report fair values of investment properties on the balance sheet or to disclose them in the notes. The standard requires also that companies have to disclose the methods and significant assumptions applied in determining fair values of investment properties. However, IAS 40 does not include any illustrative examples or other guidance on how to apply the disclosure requirements. We use a sample with publicly traded companies from the real estate sector in the EU. We find that a majority of the companies use income based methods for the measurement of fair values but there are considerable cross-country variations in the level of disclosures about the assumptions used in determining fair values. More specifically, we find that Scandinavian and German origin companies disclose more than French and English origin companies. We also test whether disclosure quality is associated with enforcement quality measured with the "Rule of Law" index according to Kaufmann et al. (2010), and associated with a secrecy- versus transparency-measure based on Gray (1988). We find a positive association between disclosure and earnings quality and a negative association with secrecy.
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades.
Language:	Anglès
Series:	Departament d'Economia de l'Empresa. Documents de treball
Series:	Document de treball (Universitat Autònoma de Barcelona. Departament d'Economia de l'Empresa) ; 13/7
Document:	Working paper
Subject:	Comunicació en l'empresa

48 p, 359.2 KB

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Research literature > Working papers > Department of Business. Working papers