Does Fair Value Reporting Affect Risk Management? International Survey Evidence

CFA Digest ◽  
2012 ◽  
Vol 42 (1) ◽  
pp. 62-64 ◽  
Author(s):  
Yong Shuai
Keyword(s):  
Risk Management ◽  
Fair Value ◽  
International Survey ◽  
Value Reporting

Does Fair Value Reporting Affect Risk Management? International Survey Evidence

2011 ◽  
Vol 40 (3) ◽  
pp. 525-551 ◽  
Author(s):  
Karl V. Lins ◽  
Henri Servaes ◽  
Ane Tamayo
Keyword(s):  
Risk Management ◽  
Fair Value ◽  
International Survey ◽  
Value Reporting

Small and medium-sized entities in the agricultural sector: Fair value reporting challenges

Agrekon ◽  
2013 ◽  
Vol 52 (2) ◽  
pp. 52-74 ◽  
Author(s):  
P.N. Maina ◽  
H.C. Wingard
Keyword(s):  
Agricultural Sector ◽  
Fair Value ◽  
Value Reporting

scholarly journals Fair Value Accounting: Implementation Challenges Facing Small and Medium-Sized Entities in the Agricultural Sector

2018 ◽  
Vol 8 (4) ◽  
pp. 60
Author(s):  
Joseph Kwasi Agyemang ◽  
Owusu Acheampong ◽  
Wiafe Nti Akenten
Keyword(s):  
Financial Reporting ◽  
Agricultural Sector ◽  
Fair Value ◽  
International Standards ◽  
Reporting Standards ◽  
Fair Value Accounting ◽  
Implementation Challenges ◽  
Financial Reporting Standards ◽  
Regulatory Bodies ◽  
Value Reporting

Nowadays, the relevance of fair value in financial reporting is gaining impetus and recent discussions are moving in the trend of full fair value reporting. Small and medium-sized entities are not ignored in this instance. The move to new reporting standards results in various challenges for different interest groups such as auditors, preparers and regulators. The main objective of the study was to establish the fair value implementation challenges facing SMEs in the agricultural sector with evidence from regulatory bodies in Ghana. The study established that there is lack of methodological relationship between existing local laws and IFRS and absence of involvement of regulatory bodies in financial reporting standards setting. In light of these challenges, the study recommends involvement of regulatory bodies in standard setting and consideration should also be given to local laws when setting international standards.

Fair Value Exposure, Auditor Specialization, and Banks’ Discretionary Use of the Loan Loss Provision

2017 ◽  
Vol 35 (2) ◽  
pp. 318-348 ◽  
Author(s):  
Brian Bratten ◽  
Monika Causholli ◽  
Linda A. Myers
Keyword(s):  
Earnings Management ◽  
Banking Industry ◽  
Fair Value ◽  
Loan Loss ◽  
Management Behavior ◽  
Management Tools ◽  
Loan Loss Provision ◽  
Value Reporting ◽  
Auditor Specialization ◽  
Industry Specialist

In this study, we examine whether banks’ use of the loan loss provision (LLP) to manage earnings is associated with (a) the extent to which banks hold assets subject to fair value reporting and (b) the use of an industry specialist auditor. We find that banks with a greater proportion of assets subject to fair value reporting (i.e., higher fair value exposure) use less LLP-based earnings management but more transaction-based earnings management (i.e., earnings management achieved by timing the realization of gains/losses). We also find that banks engaging industry specialist auditors use less LLP-based earnings management. Our findings suggest that banks’ use of the LLP to manage earnings is more limited when they have access to alternative earnings management tools and when they engage an auditor with more industry knowledge. Our results should be informative to regulators, members of the banking industry, and academics interested in the earnings management behavior of banks.

How do firms manage their interest rate exposure?

2019 ◽  
Vol 20 (5) ◽  
pp. 501-519 ◽  
Author(s):  
Andreas Hecht
Keyword(s):  
Risk Management ◽  
Interest Rate ◽  
Cash Flow ◽  
Fair Value ◽  
Separate Analysis ◽  
Content Type ◽  
Financial Firms ◽  
Exposure Data ◽  
Before And After ◽  
Data Granularity

Purpose This paper aims to identify how non-financial firms manage their interest rate (IR) exposure. IR risk is complex, as it comprises the unequal cash flow and fair value risk. The paper is able to separate both risk types and investigate empirically how the exposure is composed and managed, and whether firms increase or decrease their exposure with derivative transactions. Design/methodology/approach The paper examines an unexplored regulatory environment that contains publicly reported IR exposure data on the firms’ exposures before and after hedging. The data were complemented by indicative interviews with four treasury executives of major German corporations, including two DAX-30 firms, to include professional opinions to validate the results. Findings The paper provides new empirical insights about how non-financial firms manage their interest rate exposure. It suggests that firms use hedging instruments to swap from fixed- to floating-rate positions predominantly in the short-to medium-term, and that 63 [37] per cent of IR firm exposure are managed using risk-decreasing [risk-increasing/-constant] strategies. Practical implications Interviewed treasury executives suggest that the advanced disclosures benefit various stakeholders, ranging from financial analysts and shareholders to potential investors through more meaningful analyses on firms’ risk management activities. Further, the treasury executives indicate that the new data granularity would enable firms to carry out unprecedented competitive analyses and thereby benchmark and improve their own risk management. Originality/value The paper is the first empirical study to analyze the interest rate activities of non-financial firms based on actually reported exposure data before and after hedging, rather than using proxy variables. In addition, the new data granularity enables a separate analysis of the cash flow and fair value risk to focus on the non-financial firms’ requirements.

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