DISCLOSURE OF INTERESTS IN OTHER ENTITIES: IFRS VS. US GAAP

Abstract

Over the last two decades, poor corporate disclosure has been one of the major factors contributing to the bankruptcy of companies involved in some scandals and to the financial distress of capital markets. Disclosure, thus, is important, and this dissertation in particular focuses on a specific area of disclosure, that is on that relating to the interests of a reporting entity in such entities as subsidiaries, off-balance sheet entities, and equity-method investees. A comparison between IFRS and US GAAP in this respect is made, and such comparison is primarily based on the provisions of the standards issued by the relevant authorities. The main aim is to assess the extent of disclosure requirements in each of the two sets of standards and so to infer this way which one out of the two provides the most extensive requirements. Finally, an analysis of a sample of financial statements is made, on the one side, to try to verify the correct application of the relevant standards, and on the other, to assess also the form over the substance of such disclosure.