Patrícia Teixeira Lopes () (University of Porto, Faculty of Economics, Portugal) Lúcia Lima Rodrigues () (School of Management and Economics, University of Minho, Portugal)
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This paper analyses accounting for financial instruments of STOXX 50 companies and compare them to the requirements of IAS 32 and IAS 39, before IFRS are mandatory in the European Union. We use a list of 120 categories of inquiry and 370 possible responses and analyse companies’ annual reports. The results show that the majority of companies disclose the fair value amounts and methods of calculation but the information is neither clear nor objective, preventing the fair value information from being relevant and useful. We conclude that companies have a long way to go in terms of accounting and disclosure of financial instruments, namely derivatives. The mandatory adoption of more stringent standards such as the IAS 32 and IAS 39 may improve the information disclosed by companies. Doubts about the compliance degree and the usefulness of the information still remain. This paper brings new perspectives to the challenges of IAS/IFRS adoption, namely to what relates to fair value measurement.
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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number
239.
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