Company-specific characteristics and the choice of hedge accounting for derivatives reporting: Malaysian case

Abdullah, Azrul; Ismail, Ku Nor Izah Ku

doi:10.1504/ijaape.2017.085183

Cited by 5 publications

(1 citation statement)

References 21 publications

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“…The practise aligns with the International Accounting Standard (IAS 7), which entails listed companies to report their intention on derivatives for hedging. Despite the requirement, Abdullah and Ismail (2017) discovered that only 29.6% (48 firms) of the Malaysian listed firms provided information on their derivative positions, while the remaining firms failed to do so.…”

Section: Introductionmentioning

confidence: 99%

Impact of Derivatives User on Firms’ Performance of Shari’ah Compliant Firms

Zamzamir@Zamzamin

Haron

Ulum³

et al. 2023

IJBS

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The study examined the impact of derivatives usage on the performance of Shari'ah-compliant firms in Malaysia. The study employed a Generalised Method-of-Moment estimator (System-GMM) on a set of panel data from 2012 to 2017. A paired sample t-test for mean difference and a Wilcoxon Signed-ranks test was performed to examine the performance difference between users and non-users of derivatives. The study provided strong evidence of a significant difference in performance between users and non-users of derivatives. Moreover, the study observed better performance among derivative users than non-derivative users. The findings enriched the current Islamic financial market literature and contributed to a better understanding of the hedging activities among Shari’ah-compliant firms. The study offered new evidence on risk management using derivatives in the Islamic financial market.

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Section: Introductionmentioning

confidence: 99%

Impact of Derivatives User on Firms’ Performance of Shari’ah Compliant Firms

Zamzamir@Zamzamin

Haron

Ulum³

et al. 2023

IJBS

View full text Add to dashboard Cite

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Impact of Derivatives on Firm Value: Evidence on Shariah and Non-Shariah Compliant Firms

Zamzamin

Haron

Othman

et al. 2022

Future of Organizations and Work After the 4th Industrial Revolution

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Non-linear relationship between foreign currency derivatives and firm value: evidence on Sharīʿah compliant firms

Zamzamir@Zamzamin

Haron

Ulum³

et al. 2021

IES

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PurposeThis study examines the impact of hedging on firm value of Sharīʿah compliant firms (SCFs) in a non-linear framework.Design/methodology/approachThis study employs the system-GMM for dynamic panel data to examine the influence of derivatives usage on firm value (Tobin's Q, ROA and ROE). The sample comprised of 59 non-financial SCFs engaged in derivatives from 2000 to 2017 (18 years). The Sasabuchi-Lind-Mehlum (SLM) test for U-shaped is performed to confirm the existence of the non-linear relationship.FindingsThis study concludes that hedging significantly contributes to firm value of SCFs based on the non-linear framework. This study suggests that, first, the non-linear relationship occurs due to the different degree of derivatives usage and risk. Second, firms practice selective hedging to maintain the upside potential of firm value.Research limitations/implicationsThis study has important implications. First, the importance of risk management via derivatives to increase firm value, second, the evidence of selective hedging from the non-linear relationship between derivatives and firm value and third, the need for quality reporting on derivatives engagement by firms in line with the required accounting standard on derivatives.Originality/valueThis study fills the gap in the literature in relation to the risk management strategies of SCFs in three aspects. First, re-examines the relationship using recent data. Second, examines the relationship in the non-linear framework as the limited studies found in the literature on Malaysian firms are only based on linear relationship. Third, determines whether hedging undertaken by firms is optimal as this can only be addressed using the non-linear framework. This study is robust to the various definitions of firm value (Tobin's Q, ROA and ROE) and non-linear methodologies.

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Company-specific characteristics and the choice of hedge accounting for derivatives reporting: Malaysian case

Cited by 5 publications

References 21 publications

Impact of Derivatives User on Firms’ Performance of Shari’ah Compliant Firms

Impact of Derivatives User on Firms’ Performance of Shari’ah Compliant Firms

Impact of Derivatives on Firm Value: Evidence on Shariah and Non-Shariah Compliant Firms

Non-linear relationship between foreign currency derivatives and firm value: evidence on Sharīʿah compliant firms

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