Marina Mićin

Disclosure of Non-financial Information: The Case of Croatian Listed Companies

Financial reporting is standardized, mandatory and regulated by numerous regulations, and financial statements in the prescribed form must be published by all companies. Reporting on non-financial information has not yet been harmonized. It is still voluntary in a large extent and it depends on the willingness of management. The interests of different users of financial statements about non-financial information of companies are increasing. For the purpose of making investment and other business decisions, investors require more information about the company, employees, relations and environmental sustainability and responsible sourcing. These requirements of investors are forcing managers to publish additional non-financial information about the company. The annual report is the most important source for the publication of non-financial information. The consistency and transparency in disclosure of non-financial information in the annual report strengthens the confidence of investors in the company. The level of non-financial information disclosed in the annual report is examined on a sample of the most liquid non-financial companies at the Zagreb Stock Exchange. The analysis includes the annual reports for 3 years (2013, 2014 and 2015) in order to compare the policy of publication of non-financial information over 3 years and to determine the non-financial information (NFI) disclosure index. The study results showed an unsatisfactory level of published non-financial information of companies which are listed on the Zagreb Stock Exchange, but the policy of publication of non-financial information indicates enhancing in the transparency of the disclosure of non-financial information during the last 3 years.

Does Longer Cash Gap Require Greater External Financing

Components which significantly affect the level of working capital are inventories, accounts receivables and accounts payables. Company must tend to keep inventories at an optimal level and collect receivables as soon as possible since it is important that cash is not tied up in inventories or in receivables. Cash gap represents the difference in days between the days of paying for purchases and days of collecting cash form receivables. Considering that in these days company is without cash, the cash gap must be financed. As higher the cash gap is, more funds are needed. When company is financed from other sources, there is the cost of financing, that is, interest cost. As higher the cash gap is, interest is higher. The starting point of this research is that the relation between the cash gap and the company’s indebtedness is positive, in other words, the higher the cash gap is, liabilities are higher, such as interest cost. The research is conducted on the large entities in the Republic of Croatia for the period from the year 2010 to the year 2015. Cash gap was put in relation with debt indicators such as: financial expense which is interest cost and debt ratio which shows how big part of the company’s asset is financed from external sources. Results showed that although there is weak positive correlation between the cash gap and interest cost, as well as between the cash gap and debt ratio, those correlations are not significant.

Application of the Fair Value Concept in Function of Achievement the Objectives of Financial Statement Users

The International Accounting Standards or the International Financial Reporting Standards implement the accounting principles that enable the achievement of the objectives of financial statement users. One of the most important principles is the fair value concept. The main purpose of the paper is to investigate and analyse the accounting standards from the point of implementation of fair value concept as required or permitted accounting policy for measurement and valuation of economic categories. Also, the aim of this paper is to explore the usefulness of the information about the fair value of assets and liabilities for financial statement users. The paper critically evaluates the accounting standards with special reference to the application of fair value accounting in order to serve the interests of financial statement users. The research results show that different financial statement users have different interests, which means that the implementation of fair value concept contributes to achieving the interests of only individual financial statement users, while the interests of other financial statement users have not been fulfilled. The above shows that the implementation of fair value concept leads to the fulfilment of the objectives of only a certain number of financial statement users. Also, the research results indicate that the implementation of fair value concept has significant influence on the qualitative characteristics of accounting information.