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IFRS 8 and the Cost of Capital in Europe

journal contribution
posted on 06.01.2022, 11:57 by Ahmed Saleh, Ahmed Aboud, Yasser EliwaYasser Eliwa
This study examines segment reporting information usefulness after the adoption of IFRS 8 in 18 European Union countries. Specifically, 1) we introduce a new comprehensive measure of segment reporting quality that reflects four different dimensions of segment information, 2) we investigate the impact of segment reporting quality on the cost of equity and debt capital after the adoption of IFRS 8, and 3) we investigate the moderating role of the country-level enforcement system on the association between segment reporting quality and the cost of equity and debt capital after the adoption of IFRS 8. Using a self-constructed segment reporting quality measure and a sample of 884 firm-year observations over the period of 2007 to 2011, we provide evidence that investors and lending institutions find no change in the usefulness of segment reporting after the adoption of IFRS 8. Our study is original in using a comprehensive measure of segment reporting quality. Furthermore, our study is the first to examine the relationship between segment reporting quality and the cost of debt capital after the adoption of IFRS 8 and the moderating role of the country-level enforcement system. Our findings provide useful insights to regulator and accounting standard-setting bodies about segment reporting.

History

School

  • Business and Economics

Department

  • Business

Published in

International Journal of Finance and Economics

Publisher

Wiley

Version

AM (Accepted Manuscript)

Publisher statement

This is the peer reviewed version of the following article: Saleh, A., Aboud, A. and Eliwa, Y. (2022). IFRS 8 and the Cost of Capital in Europe. International Journal of Finance and Economics, In Press, which has been published in final form at [Link to final article using the DOI]. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited

Acceptance date

24/12/2021

ISSN

1076-9307

eISSN

1099-1158

Language

en

Depositor

Dr Yasser Eliwa. Deposit date: 30 December 2021