Corporate Risk Management and Hedge Accounting
2013
This paper provides evidence of the impact of hedge accounting under International Financial Reporting Standards (IFRS) on corporate risk management. Using a sample of large UK non-financial firms from 2003 to 2006, we show that the implementation of the new standards reduces the level of asymmetric information faced by derivative users. Specifically, for firms that hedge under IFRS we find that analysts’ forecast error and dispersion are significantly lower. The paper contributes to prior research on the eects of
Keywords:
- Hedge accounting
- Finance
- Accounting
- Generally Accepted Accounting Principles (United States)
- Accounting management
- Comparison of management accounting and financial accounting
- Accounting information system
- Financial accounting
- Economics
- International Financial Reporting Standards
- Mark-to-market accounting
- Accounting standard
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