[DOWNLOAD] ~ The Trend towards Corporate Voluntary Disclosures ~ by Reka Goch ~ Book PDF Kindle ePub Free
eBook details
- Title: The Trend towards Corporate Voluntary Disclosures
- Author : Reka Goch
- Release Date : January 03, 2006
- Genre: Business & Personal Finance,Books,
- Pages : * pages
- Size : 363 KB
Description
Since the 1980s corporations’ management are coined of the shareholder value approach. In the centre of this approach is the objective to maximize the corporate value and therefore to increase the shareholder value. Under the assumption of a perfect capital market, an increased shareholder value would be reached only by a value based management. In reality, investment decisions are made under uncertainty and for globalization reasons they are reinforced multiple. Corporate value is the basis for making effective decisions because investors are using methods based on the discounted cash flow methods. The liberalization of the capital markets lead to an enhanced competition for capital which forces corporations to report about their true value.The capital market is efficient when the stakeholders get prospective information about the corporate value but this is not required by legal regulations like the GAAP or Security and Exchange Commission (SEC). The condition to create and preserve shareholder value is the communication on the capital market. Without reporting on investments which create value and on internally performance measurement systems there is a significant danger that corporations will be undervalued by the capital markets.
Value reporting includes the traditional financial accounting - required by regulations like GAAP and International Accounting Standards (IAS) - which is expanded by the business reporting. This ensures that the communication gap between the market participants, as described below, is reduced and the investors’ needs are satisfied by providing information to make forecasts about the value and risk of investment.
Value reporting does not replace the traditional reporting which is delivered by annual and quarterly reports. It should improve the current disclosure process by addition of helpful information for investors. The value reporting focuses on qualitative supplemental information and is partly related to the accounting rules. In contract to balancing, the corporations’ advantage of value reporting is that the taxes are not relevant. Also, the regulations for annual and quarterly reports focus on backward-looking information which does not adequately reflect the corporate value. This aspect emphasizes the importance of voluntary disclosures such as business data, managements’ analysis of business data, forward-looking information, information about management and shareholders, background about the corporation, and information about intangible assets which are helpful to investors.
