Disclosure on fair value measurement of non-current assets: A study of the largest Portuguese companies

Marina Carvalho, Sónia Maria Monteiro, Sara Serra


Purpose: This paper aims to investigate whether fair value is used in the largest Portuguese companies as a measurement basis for non-current assets and to analyze the degree of compliance of the disclosure requirements on fair value measurement in these assets.

Methodology: The content analysis methodology was used, analyzing the Reports and Accounts and the Auditor Report for 2019 and 2020 of 59 large companies operating in Portugal. Subsequently, developed a Disclosure Index to measure the level of compliance with the disclosure requirements on fair value measurement in the non-current assets.

Findings: The findings indicate that: (a) 59,3% of the sample do not use the fair value, as a measurement basis for non-current assets; (b) investment properties are the asset with the largest number of companies using the fair value measurement, but the average index of compliance is only 0.07; (c) non-compliance of most of the disclosure requirements required by accounting standards (global average index value =0,13).The highest disclosure index is related to the tangible assets and biological assets.

Research limitations: This study has as a limitation the small size of the sample. On the other hand, the subjectivity inherent to the content analysis of the reports is also pointed out as a limitation of the adopted methodology.

Originality: This study contributes to the literature, focusing its analysis on a broader set of non-current assets (tangible and intangible assets, investment properties and biologic assets), contrary to other studies which focus only on one or two types of non-current assets.

Keywords: Fair Value, Subsequent measurement, Non-current assets, Compliance, Disclosure requirements, Disclosure index.

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