Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324536 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] Central European Economic Journal (CEEJ) [ISSN:] 2543-6821 [Volume:] 8 [Issue:] 55 [Year:] 2021 [Pages:] 15-24
Publisher: 
Sciendo, Warsaw
Abstract: 
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 Standards (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.
Subjects: 
market valuation
risk disclosures
IFRS 7
downside risk
JEL: 
M42
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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