Risque d’estimation, coût du capital et communication des tests de dépréciation

Paugam, Luc; Ramond, Olivier; Husson, Bruno; Philippe, Henri; Casta, Jean‐François

doi:10.4000/fcs.1260

Cited by 6 publications

(10 citation statements)

References 23 publications

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“…In addition, and in line with our expectations and previous results (Li, 2010;Paugam et al, 2013), there is a negative association between firm size and the capital cost. This association can be explained by the fact that large companies are encouraged to disclose more information to the public than the smaller.…”

Section: Ifrs and Cost Of Capitalsupporting

confidence: 81%

IFRS Mandatory Adoption Effect on the Information Asymmetry: Immediate or Delayed?

Turki¹,

Wali²,

Boujelbène³

2017

AABFJ

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The purpose of this paper is to examine the relationship between the mandatory adoption of IFRS/IAS and the information content of earnings in the European Union. More accurately, this study aims to determine if the effect of IFRS adoption on the level of information asymmetry, apprehended by the cost of capital and the financial analysts' forecasts, is immediate or delayed. Based on a longitudinal study, we find evidence that for the two first years of adoption, international standards reduces significantly the cost of capital and the dispersion of the financial analysts' forecasts. Furthermore, the magnitude of this effect increases with increasing the number of years after IFRS adoption. The findings further show that the effect of IFRS adoption on financial analysts' errors is not immediate and that the errors decrease from the third year following the date of the first adoption.Overall, the findings of this study highlight the importance of adopting IFRS in the reduction of information asymmetry. AbstractThe purpose of this paper is to examine the relationship between the mandatory adoption of IFRS/IAS and the information content of earnings in the European Union. More accurately, this study aims to determine if the effect of IFRS adoption on the level of information asymmetry, apprehended by the cost of capital and the financial analysts' forecasts, is immediate or delayed. Based on a longitudinal study, we find evidence that for the two first years of adoption, international standards reduces significantly the cost of capital and the dispersion of the financial analysts' forecasts. Furthermore, the magnitude of this effect increases with increasing the number of years after IFRS adoption. The findings further show that the effect of IFRS adoption on financial analysts' errors is not immediate and that the errors decrease from the third year following the date of the first adoption.Overall, the findings of this study highlight the importance of adopting IFRS in the reduction of information asymmetry. JEL Classification: M40, G34

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Section: Ifrs and Cost Of Capitalsupporting

confidence: 81%

IFRS Mandatory Adoption Effect on the Information Asymmetry: Immediate or Delayed?

Turki¹,

Wali²,

Boujelbène³

2017

AABFJ

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“…For French listed firms, disclosures with regard to impairment‐testing vary greatly from one firm to another (see Paugam et al., ). For instance, the pharmaceutical company Stallergenes, in its 2006 annual report's ‘main accounting methods’ section, provides only minimal narrative information about impairment‐testing.…”

Section: Impairment‐testing Disclosures and Information Risk: Developmentioning

confidence: 99%

Effect of Impairment‐Testing Disclosures on the Cost of Equity Capital

Paugam

Ramond²

2015

Business Fin & Account

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International audienceInformation risk – the uncertainty regarding the parameters of the distribution of firms’ future cash flows – generates valuation errors and is costly to investors who require a higher return to compensate for greater information risk. We argue that, on average, through their impairment-testing disclosures, managers convey information that reduces information risk. Using disclosures from firms included in the SBF 250 index of Euronext Paris over the period 2006–2009, we document a negative association between impairment-testing disclosures and implied cost of equity capital. We find that prospective entity-specific impairment-testing disclosures are negatively associated with cost of capital whereas descriptive disclosures exhibit no association with cost of capital. Additionally, we document that firms which avoid booking impairments when low performance indicators suggest a greater likelihood of impairments exhibit no association between impairment-testing disclosures and cost of capital. This suggests that those firms’ disclosures are perceived as less accurate by investors. We also find that prospective impairment-testing disclosures are negatively related to analysts’ forecast errors. Our study adds to the literature on the economic consequences of financial reporting and sheds light on the consequences of one accounting mechanism, namely impairment-testing disclosures, ensuring conservatism of financial reporting

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“…As regards the relevance, it should be noted that the IASB itself identifies inconsistencies motivated by a lack of specific guidance in some of the IAS/IFRS that may lead to different levels of disclosure (IASB, 2019). Through the literature, it is also possible to see that the level of disclosures is different according to the standards under analysis, either in Portugal (Kasyan et al, 2018) or in other markets (Alkababji, 2016;Fahad et al, 2020;Glaum et al,2013;Paugam et al, 2013). Such divergences can be potentially explained by the different methodologies, periods, and samples used, but also by the different materials involved.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Despite the existence of research that covers a given (or some) standard, covering different assets and liabilities that can be measured at a current value under several IAS and IFRS [namely on IFRS 13 (Alkababji, 2016;Kasyan et al, 2018), IAS 19 (Ali et al, 2004;Fahad et al, 2020;Santos et al, 2014;Street & Gray, 2002;Tsalavoutas, 2011), IAS 36 (Glaum et al 2013;Paugam et al, 2013;Santos et al, 2014;Tsalavoutas, 2011), and IAS 37 (Santos et al, 2014;Tsalavoutas, 2011)], none studies were identified that assess disclosures related to discount rate in a broader perspective. Thus, this study contributes in this regard.…”

Section: Introductionmentioning

confidence: 99%

“…Through the literature review, it was also found that the analysis on financial information disclosures is considerably more abundant when the topic is related to MD than VD (Ali et al, 2004;Alkababji, 2016;Fahad et al, 2020;Glaum et al, 2013;Hassan & Marston, 2010;Healy & Palepu, 2001;Kasyan et al, 2018;Lopes & Rodrigues, 2007;Meek et al, 1995;Paugam et al, 2013;Santos et al, 2014;Street & Gray, 2002;Tsalavoutas, 2011). Furthermore, despite the significant number of studies on VDs covering different topics [see, for instance, Zamil et al (in press)], there are still gaps in what concerns specific matters related to financial information for which some requirements are missing in IAS and IFRS, such as discount rates, the object of this research.…”

Section: Introductionmentioning

confidence: 99%

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The explanatory factors of disclosures related to the discount rates by listed entities in Portugal

Assunção

Albuquerque

2023

Rev. contab. finanç.

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This paper aims to identify the explanatory factors of mandatory disclosure (MD) and voluntary disclosure (VD) levels related to discount rates, based on disclosure theories. The size, leverage, profitability, and audit firms were selected from different theories, namely agency theory, signaling theory, positive accounting theory, including the political cost hypothesis, and the cost of capital theory. Furthermore, the materiality (weight of the items) and the relevance (nature) of the topic were also considered, based on the evidence already obtained in the literature. Research on disclosures related to discount rates has been assessed either as an incidental topic or from a limited-scope analysis, particularly with respect to MDs. This paper assesses this topic as its specific object of analysis for both MD and VD. The use of the discount rate has been assuming growing importance within financial reporting. Therefore, this topic should deserve particular attention from international standard-setting bodies. The understanding of the proper set of items to be disclosed and understanding the factors that explain its disclosure, aligned with the efforts to assure its compliance by legal authorities, may contribute to reducing asymmetries and increasing transparency in entities' financial reporting. This study uses the method of archival research and content analysis of consolidated reports and accounts for the year 2020 of listed entities in Euronext Lisboa. Regression models were used, having disclosure indices related to discount rates as dependent variables. This paper finds a positive association between disclosures related to discount rates and the entity’s size, as well as the materiality and the relevance, assessed by the weight of the items and the nature of the topic under assessment, respectively. It adds new explanatory factors on the VDs and MDs related to discount rates in a broader perspective of analysis.

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Risque d’estimation, coût du capital et communication des tests de dépréciation

Cited by 6 publications

References 23 publications

IFRS Mandatory Adoption Effect on the Information Asymmetry: Immediate or Delayed?

IFRS Mandatory Adoption Effect on the Information Asymmetry: Immediate or Delayed?

Effect of Impairment‐Testing Disclosures on the Cost of Equity Capital

The explanatory factors of disclosures related to the discount rates by listed entities in Portugal

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