Company-Specific Characteristics and the Choice of Hedge Accounting for Derivatives Reporting: Malaysian Case

Abdullah, A., & Ismail, K. N. I. K. (2017). Company-Specific Characteristics and the Choice of Hedge Accounting for Derivatives Reporting: Malaysian Case. International Journal of Accounting, Auditing and Performance Evaluation, 13(3), 280-292. DOI: 10.1504/IJAAPE.2017.085183

20 Pages Posted: 13 Dec 2018

See all articles by Azrul Abdullah

Azrul Abdullah

Universiti Teknologi MARA; Fakultas Vokasi

Ku Nor Izah Ku Ismail

Universiti Utara Malaysia - School of Accountancy

Date Written: 2017

Abstract

This paper investigates the adoption of hedge accounting by Malaysian listed companies in reporting their use of derivatives for hedging activities. Based on a sample of 300 Malaysian listed companies, we found that only 162 companies (54 percent) used derivatives to hedge their financial risks exposure and only 30 percent of the companies chose to apply hedge accounting. In addition, this study examines the relationship between the company specific characteristics and their application of hedge accounting. The logistic regression results showed that the decision to apply hedge accounting by Malaysian companies is positively influenced by the company size and leverage. The implications of the findings were discussed.

Keywords: Derivatives; Financial instruments; Hedge Accounting; Company Specific Characteristics

JEL Classification: G30; G32; G31

Suggested Citation

Abdullah, Azrul and Ku Ismail, Ku Nor Izah, Company-Specific Characteristics and the Choice of Hedge Accounting for Derivatives Reporting: Malaysian Case (2017). Abdullah, A., & Ismail, K. N. I. K. (2017). Company-Specific Characteristics and the Choice of Hedge Accounting for Derivatives Reporting: Malaysian Case. International Journal of Accounting, Auditing and Performance Evaluation, 13(3), 280-292. DOI: 10.1504/IJAAPE.2017.085183, Available at SSRN: https://ssrn.com/abstract=3286498 or http://dx.doi.org/10.2139/ssrn.3286498

Azrul Abdullah (Contact Author)

Universiti Teknologi MARA ( email )

Universiti Teknologi MARA
Perlis Branch, Arau Campus
Arau, Perlis 02600
Malaysia

Fakultas Vokasi ( email )

Universitas Airlangga, Surabaya, Indonesia
waqar.ahmed.m-2018@feb.unair.ac.id
surabaya, AK jawa timur 60115
Indonesia

Ku Nor Izah Ku Ismail

Universiti Utara Malaysia - School of Accountancy ( email )

Sintok, Kedah Darul Aman 06010
Malaysia

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