The Impact of Macroeconomic Variables on Corporate Performance - What Shareholders Ought to Know?
Increased integration and growing macroeconomic fluctuations require more attention to be paid to the link between the ”noise” that these fluctuations represent and the company’s own development. For many reasons management must weed out the effects of the ”noise” so as to obtain a clear picture of the long-term sustainable profits, and thus a picture of how the company’s intrinsic competitiveness is fostered. An understanding of the effects of the fluctuations also provides the basis for risk assessment. How far, then, should this “new” view of corporate performance be extended to outsider shareholders? Current reporting practice does not provide these shareholders with an adequate idea of the character and magnitude of the macroeconomic impact on the company. IAS 1 (rev. 1997) indicates that an improvement in this important area may be in the offing. This paper discusses four different interpretational levels of this standard and what these levels mean in terms of relevant information transmitted to outsider shareholders.
|Date of creation:||23 Jan 2002|
|Date of revision:||22 Aug 2007|
|Publication status:||Published in Financial Analysts Journal, 2003, pages 36-50.|
|Contact details of provider:|| Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden|
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oxelheim, Lars & Wihlborg, Clas, 1991. "Accounting for Macroeconomic Influences on the Firm," Working Paper Series 308, Research Institute of Industrial Economics.
- Christine R Hekman, 1985. "A Financial Model of Foreign Exchange Exposure," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 16(2), pages 83-99, June.
- McNown, Robert & S. Wallace, Myles, 1989. "National price levels, purchasing power parity, and cointegration: a test of four high inflation economies," Journal of International Money and Finance, Elsevier, vol. 8(4), pages 533-545, December.
- Mahdavi, Saeid & Zhou, Su, 1994. "Purchasing power parity in high-inflation countries: further evidence," Journal of Macroeconomics, Elsevier, vol. 16(3), pages 403-422.
- Adler, Michael & Dumas, Bernard, 1983. " International Portfolio Choice and Corporation Finance: A Synthesis," Journal of Finance, American Finance Association, vol. 38(3), pages 925-84, June.
When requesting a correction, please mention this item's handle: RePEc:hhs:iuiwop:0571. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elisabeth Gustafsson)
If references are entirely missing, you can add them using this form.