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Corporate risk management and hedge accounting

Panaretou, A. and Shackleton, M. B. and Taylor, P. A. (2013) Corporate risk management and hedge accounting. Contemporary Accounting Research, 30 (1). pp. 116-139. ISSN 0823-9150

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    Abstract

    Motivated by the debate about the economic consequences of mandatory adoption of International Financial Reporting Standards (IFRS), this study investigates the effect of hedge accounting under IFRS on corporate risk management. Using a sample of large UK non-financial firms from 2003 to 2008, 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 effects of hedge accounting and on the adoption of IFRS.

    Item Type: Article
    Journal or Publication Title: Contemporary Accounting Research
    Additional Information: This is a pre-print of an article published in Contemporary Accounting Research, 30 (1), 2013. (c) Wiley.
    Uncontrolled Keywords: derivatives ; hedging ; asymmetric information ; hedge accounting
    Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
    Departments: Lancaster University Management School > Accounting & Finance
    ID Code: 45766
    Deposited By: ep_importer_pure
    Deposited On: 11 Jul 2011 19:37
    Refereed?: Yes
    Published?: Published
    Last Modified: 17 Jun 2014 10:23
    Identification Number:
    URI: http://eprints.lancs.ac.uk/id/eprint/45766

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