Rights statement: This is a pre-print of an article published in Contemporary Accounting Research, 30 (1), 2013. (c) Wiley.
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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Corporate risk management and hedge accounting
AU - Panaretou, A.
AU - Shackleton, M. B.
AU - Taylor, P. A.
N1 - This is a pre-print of an article published in Contemporary Accounting Research, 30 (1), 2013. (c) Wiley.
PY - 2013/3
Y1 - 2013/3
N2 - 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.
AB - 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.
KW - derivatives
KW - hedging
KW - asymmetric information
KW - hedge accounting
U2 - 10.1111/j.1911-3846.2011.01143.x
DO - 10.1111/j.1911-3846.2011.01143.x
M3 - Journal article
VL - 30
SP - 116
EP - 139
JO - Contemporary Accounting Research
JF - Contemporary Accounting Research
SN - 0823-9150
IS - 1
ER -