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Company-specific characteristics and the choice of hedge accounting for derivatives reporting: Malaysian case

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  • Abdullah, Azrul Bin

    (Universiti Teknologi MARA, Perlis Branch, Arau Campus)

Abstract

This study investigates the choice of applying hedge accounting among Malaysian listed companies in reporting their use of derivatives for hedging activities. Based on a sample of 300 Malaysian listed companies, we found that only 162 companies (54%) use derivatives to hedge their financial risk exposure and only 30% of those companies choose to apply hedge accounting. In addition, this study examines the relationship between company-specific characteristics and the choice to apply hedge accounting. The logistic regression results show that the decision to apply hedge accounting by Malaysian companies is positively influenced by company size and leverage. The implications of the findings are discussed and some conclusions are drawn.

Suggested Citation

  • Abdullah, Azrul Bin, 2018. "Company-specific characteristics and the choice of hedge accounting for derivatives reporting: Malaysian case," SocArXiv npa6v, Center for Open Science.
    • Handle: RePEc:osf:socarx:npa6v
    DOI: 10.31219/osf.io/npa6v
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    References listed on IDEAS

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    1. Azrul Bin Abdullah & Ku Nor Izah Ku Ismail, 2008. "Disclosure of Voluntary Accounting Ratios by Malaysian Listed Companies," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 6(1), pages 1-20, January.
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    5. 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.
    6. Lopes, Patricia Teixeira & Rodrigues, Lucia Lima, 2007. "Accounting for financial instruments: An analysis of the determinants of disclosure in the Portuguese stock exchange," The International Journal of Accounting, Elsevier, vol. 42(1), pages 25-56.
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    14. Azrul Abdullah & Ku Nor Izah Ku Ismail, 2017. "Company-specific characteristics and the choice of hedge accounting for derivatives reporting: Malaysian case," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 13(3), pages 280-292.
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