Value-Relevant Disclosures (Value Reporting): Conceptual Framework and Evidence from German Listed Companies

The objective of this paper is threefold. First we develop a comprehensive framework for value-relevant disclosures (Value Reporting) to serve as the theoretical background for BusinessReporting in order to give guidance for preparers and standard setters in their task to structure theinformation presented in management reports concerning valuation issues. From this framework wederive a comprehensive list of information contents needed by investors for making capital-allocation decisions. In the second part we use these criteria to analyze the disclosure practice of the100 largest German listed companies. From this analysis we obtain an overall level of disclosurewhich in the third step we relate to economic determinants. The results show a significant influenceof the firms business objective, but no influence of firm size, auditor size and the application ofinternational accounting standards on the level of value-relevant voluntary disclosures.