An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Wede E. Brownell
University of Central Oklahoma

Abstract: The SEC Financial Reporting Release No. 48 provides three alternatives for reporting derivatives: the tabular presentation, sensitivity analysis format, and value at risk format. Of the three alternatives, the tabular presentation is the most disaggregated. The purpose of this study is to determine whether firms using the tabular presentation experienced smaller information asymmetry than firms using the aggregated formats, namely, the sensitivity analysis format or the value at risk format. The regression analysis revealed that the disaggregated tabular format firms experienced smaller information asymmetry than firms using either the aggregated sensitivity analysis or the value at risk format. The results also indicate that firms using the tabular presentation experienced greater liquidity.

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