The accounting principle of decomposing hybrid financial instruments into their derivative and non-derivative components is widely accepted as it results in a consistent treatment of hybrid instruments and economically equivalent combinations of contracts. On the other hand, non-contingent...

With the endorsement of IFRS 7, which became effective in 2007, the European regulation of bank disclosures has substantially changed. Using a sample of 171 banks from 28 European countries, I analyze the effect of the standard's first-time adoption on disclosure quality. I find that disclosure...

We use a sample of conference calls and analyst research reports from international banks to examine how financial analysts request and communicate fair value-related information in their valuation process. We find that analysts devote considerable attention to fair value-related topics. Most of...

With the mandatory introduction of IFRS 7 in 2007 and the succession of IAS 30, there are no more bank-specific accounting rules left within extant IFRS. As IFRS 7 is a product-specific accounting standard dealing with the presentation of all types of financial instruments, the new standard will...

There is a wide variety of reporting choices when presenting and disclosing financial instruments under IFRS. Behavioral theory suggests that the label under which a financial instrument is presented affects the risk perception of investors. We analyze in an experimental setting how and why the...

On stock markets, there are regularly (at least) two different information sets: The set determining the market price is not necessarily the same as the one being available to the entity’s management. If the management has the ability to influence the first one, it consequently has the...

There is a considerable degree of heterogeneity in the way how European banks present their financial instruments in IFRS financial statements. We identify three major presentation formats that are currently applied: a presentation by measurement category, by product, and by purpose. We find the...

At the peak of the financial crisis in October 2008, the IASB amended IAS 39 to grant companies the option of abandoning fair value recognition for selected financial assets. Using a comprehensive global sample of publicly listed IFRS banks, we find that banks use the reclassification option to...