An analysis of the changes in the recognition and disclosure criteria adopted by Maltese public listed companies

Abstract

There isn't only one possible 'right' approach in presenting financial information. Since net income is the result of many accounting choices, the scope of this study is to access the financial reporting practices adopted by selected Maltese listed companies. The main objective of this dissertation is to analyse annual reports and financial statements, by assessing any changes in the recognition and disclosure criteria adopted by selected local listed companies. Significant accounting policies and notes to the financial statements of five listed companies were analysed for information concerning how and when revenues were being recognised, details on assets, inventory valuation, borrowing costs and for other relevant information. At times changes in accounting policies resulted due to changes in International Accounting Standards. Other changes in accounting policies might have resulted due to strategic reasons to accomplish manager and company objectives. In order to evaluate accounting policy choice, analysts should be aware of the different pressures and expectations placed by and on, various participants in the financial community. Various recommendations to maintain and improve the integrity of financial reporting of local listed companies are to be found at the end of this study.