The quality of derivative instruments disclosure in accordance with the IFRS 7

Keywords:
financial instruments, risk measurement, disclosure, transparency.

Abstract:
This paper analyses the importance of financial instruments disclosure and transparency of such information following the global financial crisis, in accordance with the accounting regulatory framework, mainly the IFRS 7: Financial instruments Disclosure. The authors pointed out that derivative financial instruments are mainly used by the companies with the aim to reduce tax liability and the cost of capital. The accounting standards attempted to establish additional criteria for disclosing the effects of these sophisticated transactions by increasing the volume of information on derivative risks. The main hypothesis in this paper is that despite the fact that the accounting rules are quite rigid in terms of financial derivative disclosures, the investors are not satisfied with their quality as they still cannot cover all the risks to which the company is exposed when entering into derivative transactions.

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G. Knežević, V. Pavlović, P. Vukadinović, “The quality of derivative instruments disclosure in accordance with the IFRS 7,” in Synthesis 2015 - International Scientific Conference of IT and Business-Related Research, Belgrade, Singidunum University, Serbia, 2015, pp. 405-409. doi:10.15308/Synthesis-2015-405-409

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Knežević, G., Pavlović, V., Vukadinović, P. (2015). The quality of derivative instruments disclosure in accordance with the IFRS 7. Paper presented at Synthesis 2015 - International Scientific Conference of IT and Business-Related Research. doi:10.15308/Synthesis-2015-405-409

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