Articlegreen2003

Disclosure versus recognition: The case of asset revaluations

44 citations0/0 files storedAsia-Pacific Journal of Accounting & Economics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Auditing, Earnings Management, Governance Accounting Theory and Financial Reporting Financial Reporting and Valuation Research

Abstract

Australian GAAP requires firms to either disclose or recognise the current values of real estate in their financial statements. Given recognition criteria related to reliable measurement, the propensity to recognise an upward revaluation is subject to the inherent uncertainty of the assessed increase in value. Accordingly, we predict and find that managers are more likely to recognise (rather than just disclose) revaluations when the revaluation estimate is more reliable. The recognition criteria contained in Australian GAAP implies that market participants will rationally infer that revaluations recognised in the balance sheet are more reliably measured than those disclosed in footnotes. An analysis of share market effects finds that the market discounts disclosure compared to recognition of real estate revaluations. This effect becomes insignificant when controls for the reliability of revaluations are included in the analysis, and we therefore conclude that the value relevance of recognised revaluations is not due to recognition per se, but rather to the fact that the assets being revalued are more reliably measured. © City University of Hong Kong.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 44 citations exist upstream.

References

2001The relevance of the value-relevance literature for financial accounting standard setting 1998Revalued Financial, Tangible, and Intangible Assets: Associations with Share Prices and Non-Market-Based Value Estimates 2000The Relevance of the Value Relevance Literature for Financial Accounting Standard Setting 2009Scale Effects in Capital Markets‐Based Accounting Research 1999Revaluations of fixed assets and future firm performance: Evidence from the UK 1993An Investigation of Revaluations of Tangible Long-Lived Assets 1999The Value Relevance of Financial Statement Recognition vs. Disclosure: Evidence from SFAS No. 106 1987The Impact of New Pension Disclosure Rules on Perceptions of Debt

Cited by

2011Are voluntary disclosures that disavow the reliability of mandated fair value information informative or opportunistic?2012Incentives for fixed asset revaluations: the UK evidence 2012Asset revaluations: motives and choice of items to revalue 2012Do alternative methods of reporting non-controlling interests really matter?2015The Accuracy of Disclosures for Complex Estimates: Evidence from Reported Stock Option Fair Values

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.