Financial Reporting Disclosure Practices: Particular Case of Fair Value Measurement

Abstract

The financial reporting process involves an extremely complex relationship between accounting, regulators, and markets. As the 2010 International Accounting Standards Board’s Conceptual Framework for Financial Reporting emphasizes, the objective of general purpose financial reporting is to provide useful financial information about the reporting entity to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity. Special status is automatically attributed to investors whose needs, due to their role in providing resources for the entity, must be addressed. The international accounting standard setter therefore admits to putting investors first among users of accounting information. Even when looking at other stakeholders, the purpose of the financial reporting process is to provide information that is useful for the decision making process. The term “accounting information” encompasses both quantitative and qualitative data. Sound corporate governance policies should therefore stimulate companies to present information that is useful when analyzed in relation to users’ needs. Despite sounding quite simple, this represents an objective which is not easy to achieve. Int Adv Econ Res (2014) 20:123–124 DOI 10.1007/s11294-013-9429-9