The Determinants of Disclosure Level

Author: Eleni Vrentzou

The significant role of financial information disclosure, further to the presentation of the accounting data in the financial statements, is one of the main determinants of the International Financial Reporting Standards. The disclosure information required by each single Accounting Standard according to the field analyzed, in combination to the specific Standards for information disclosure (IAS14 substituted by IFRS8) constitute basic principles for the true and fair view of complete financial information. The information required by IAS14 is concentrated to present segmental disclosure by defining reporting segments as the organizational units. The definition of organizational units is based on product lines or on geography, for which information is reported to key management personnel for the purpose of performance assessment and future resource allocation. The need for more specific segment disclosure and the extensive use of this type of information provided by many supervisory authorities and other users, had as a result the update of IAS14 and its substitution by IFRS8. The new management approach for segment reporting, which characterizes IFRS8 as well the relevant SFAS 131 which was also recently released, is therefore examined and analyzed from the perspective of the quality of the information provided, as well, as for the usefulness of this information to supervisory authorities and the rest of the users of the financial statements. Moreover, the motives provide by IFRS8 to voluntarily disclose further company’s information is also examined, since companies frequently make use of disclosure requirements in order to direct information and conclusions according to their strategy