Risk Disclosure and Firm Value: Evidence from the United Kingdom
The International Accounting Standard Board (IASB) aimed to increase the decision usefulness of firms’ risk disclosures with the 2007 introduction of the International Financial Reporting Stand-ards (IFRS) 7. Specifically, listed firms were mandated to provide information to the market on both their...
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| Veröffentlicht in: | Central European economic journal. 2021-01, Vol.8 (55), p.15-24 |
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| creator | Tache, Marta |
| description | The International Accounting Standard Board (IASB) aimed to increase the decision usefulness of firms’ risk disclosures with the 2007 introduction of the International Financial Reporting Stand-ards (IFRS) 7. Specifically, listed firms were mandated to provide information to the market on both their (1) exposure and (2) risk management, which are associated with holding their financial instruments. This study investigates whether IFRS 7 financial instruments and their disclosures are associated with firm valuation. Using data on premiumlisted United Kingdom (UK) companies, for the period 2007–2019, I find evidence that firm value (proxied by Tobin’s Q) is negatively associated with the quantity of IFRS 7 interest and credit risk disclosures. I further find that the market value decreases with the presence of quantitative information tabulated in the disclosures. The findings of this study have important implications for the IASB’s standard-setting process. |
| doi_str_mv | 10.2478/ceej-2021-0002 |
| format | Article |
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The findings of this study have important implications for the IASB’s standard-setting process.</description><subject>Accounting - Business Administration</subject><subject>Business Economy / Management</subject><subject>downside risk</subject><subject>Financial Markets</subject><subject>IFRS 7</subject><subject>M42</subject><subject>market valuation</subject><subject>Present Times (2010 - today)</subject><subject>risk disclosures</subject><subject>Transformation Period (1990 - 2010)</subject><issn>2543-6821</issn><issn>2543-6821</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2021</creationdate><recordtype>article</recordtype><sourceid>REL</sourceid><recordid>eNp1kMtOwzAURC0EElVhy4qFP4CU-BEngQ2otICohIQoWyuxr4tLHpWdgPr3JKRSWcDqzuLM6M4gdEbCCeVxcqkA1gENKQnCMKQHaEQjzgKRUHL4Sx-jU-_XPcEIjygboZsX6z_wnfWqqH3rAGeVxnPrSvyWFS1c4dmn1VApwMbVJW7eAS8r24DGT7Za6bo8QUcmKzyc7u4YLeez1-lDsHi-f5zeLgJFUxIFOSSKCMGZiBhXOSeGklhAmiuTK5rQJIlypWKmqYaQGGG4EEZQE4IxTIFiYzQZcpWrvXdg5MbZMnNbSULZTyD7CWQ_gfwpOEZ4MICqK-v3eJwITojgvEOuB-QrKxpwGlau3XZCruvWVV2bf7KTKCJR577YfQRQF3tP5hqrCpC6VjKNGUtTudGmw8__xAeEfQMBSYXd</recordid><startdate>20210101</startdate><enddate>20210101</enddate><creator>Tache, Marta</creator><general>University of Warsaw Press</general><general>Wydawnictwa Uniwersytetu Warszawskiego</general><general>Sciendo</general><scope>AE2</scope><scope>BIXPP</scope><scope>REL</scope><scope>OQ6</scope><scope>AAYXX</scope><scope>CITATION</scope></search><sort><creationdate>20210101</creationdate><title>Risk Disclosure and Firm Value: Evidence from the United Kingdom</title><author>Tache, Marta</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c2915-be8c166436534cb41f2176e9bcfbc282885bcc73d2de01f6f466f62f0eff3cec3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2021</creationdate><topic>Accounting - Business Administration</topic><topic>Business Economy / Management</topic><topic>downside risk</topic><topic>Financial Markets</topic><topic>IFRS 7</topic><topic>M42</topic><topic>market valuation</topic><topic>Present Times (2010 - today)</topic><topic>risk disclosures</topic><topic>Transformation Period (1990 - 2010)</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Tache, Marta</creatorcontrib><collection>Central and Eastern European Online Library (C.E.E.O.L.) 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| fulltext | fulltext |
| identifier | ISSN: 2543-6821 |
| ispartof | Central European economic journal., 2021-01, Vol.8 (55), p.15-24 |
| issn | 2543-6821 2543-6821 |
| language | eng |
| recordid | cdi_walterdegruyter_journals_10_2478_ceej_2021_000285515 |
| source | De Gruyter Open Access Journals; EZB-FREE-00999 freely available EZB journals |
| subjects | Accounting - Business Administration Business Economy / Management downside risk Financial Markets IFRS 7 M42 market valuation Present Times (2010 - today) risk disclosures Transformation Period (1990 - 2010) |
| title | Risk Disclosure and Firm Value: Evidence from the United Kingdom |
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