The Development of Voluntary Cash Flow Statements in Germany and the Influence of International Reporting Standards

36 Pages Posted: 27 Sep 1999  

Christian Leuz

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Center for Financial Studies (CFS); University of Pennsylvania - Wharton Financial Institutions Center; CESifo Research Network

Multiple version iconThere are 2 versions of this paper

Date Written: December 1999

Abstract

This paper studies the incentives of German firms to voluntarily disclose cash flow statements over time. While cash flow statement are mandated under many GAAP regimes, its disclosure has not been mandatory in Germany until recently. Nevertheless, an increasing number of firms provides cash flow statements voluntarily. These firms are likely to be influenced by recommendations of the German accounting profession, IAS 7 as well as the respective standards of other countries. The idea of the paper is to study this influence by looking at the adoption pattern over time and the format of the cash flow statement. It documents the development of voluntary cash flow statement disclosures by German firms with respect to "milestones" in the evolution of German professional recommendations and respective international standards. The cross-sectional determinants of voluntary (international) cash flow statements are analyzed using probit regressions and factor analysis. The results are generally consistent with the idea that capital-market forces drive the disclosure of cash flow statements that are in line with international reporting practice.

JEL Classification: M41, M45, G15, G32

Suggested Citation

Leuz, Christian, The Development of Voluntary Cash Flow Statements in Germany and the Influence of International Reporting Standards (December 1999). Available at SSRN: https://ssrn.com/abstract=171736 or http://dx.doi.org/10.2139/ssrn.171736

Christian Leuz (Contact Author)

University of Chicago - Booth School of Business ( email )

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HOME PAGE: http://faculty.chicagobooth.edu/christian.leuz/

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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HOME PAGE: http://www.nber.org

European Corporate Governance Institute (ECGI)

Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Center for Financial Studies (CFS) ( email )

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Frankfurt am Main, 60323
Germany

University of Pennsylvania - Wharton Financial Institutions Center

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Philadelphia, PA 19104-6218
United States

CESifo Research Network

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Munich, DE-81679
Germany

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