Unspecified Operating Expense Disclosure Requirements in New Zealand. Has FRS 9 Made a Difference?

Abstract

This paper examines the effect that the introduction of the FRS 9, the general disclosure standard in New Zealand, has on the level of disclosure of certain unspecified operating expenses. Generally, a low level of operating expense disclosure was found with no overall improvement recorded after the introduction of FRS 9. In many cases, companies did not disclose any unspecified operating expenses. Firm size and overseas listing/ownership appeared to be positively associated with the disclosure of unspecified operating expenses. Most companies did disclose the mandatory expenses monitored (depreciation, audit and directors' fees). Commentary is provided on the inadequacy of the discretionary aspects of accounting standards such as FRS 9, and the inadequacy of regulatory enforcement. Given the move to international harmonisation, and the level of disclosure seemingly at odds with international practice, the adoption and enforcement of International Accounting Standard 1 (IAS 1) would provide a simple solution.

Citation

Lont, D. (2002), "Unspecified Operating Expense Disclosure Requirements in New Zealand. Has FRS 9 Made a Difference?", Pacific Accounting Review, Vol. 14 No. 2, pp. 57-99. https://doi.org/10.1108/eb037967