The relative information content of the components of the reserve disclosures: reserve quantities vs. the standardised measure
by Kevin Thomas Berry, William Wilcox, Charlotte Wright
International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE), Vol. 1, No. 3, 2004

Abstract: While a number of research studies have attempted to evaluate the information content of reserve quantity and reserve value disclosures, no research study has examined the information content of these reserve-related disclosures relative to one another. This study sets out to examine the information content of reserve quantity disclosures vs. reserve value disclosures. Further, this study examines the information content of disclosure of the components of the year-to-year changes in reserve quantities relative to the changes in reserve values. Both a discrimination methodology and the Davidson-MacKinnon's J test for non-nested models are used to test the two hypotheses. The results of testing using both methodologies provides no evidence to reject the null hypotheses in favour of the alternatives that the reserve value disclosures provide more information than the reserve quantity disclosures. Therefore, the results do not support the current FASB statement requiring reserve value disclosures. This information should be of use to the IASB in determining whether to require reserve value disclosures, similar to those required by the FASB, in addition to reserve quantity disclosures.

Online publication date: Tue, 28-Dec-2004

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