Are Discount Rates In Disarray In The First Year Adoption Of International Financial Reporting Standards?

In calculating recoverable amount of cash generating units (CGUs) under the implementation value in use approach, discount rate selection represents a central point deciding magnitude impairment charges Hong Kong Financial Reporting Standards (HKFRSs). The discretion discounted flow model (DCF) could be used opportunistically to misstate losses for benefit financial statement preparers and causes transparency reports. This study is conducted provide evidence opportunistic behaviours relating on goodwill by reporting preparers. By comparing independently estimated risk adjusted rates those subjectively presented large listed firms first year adoption HKFRSs, results showed that were disarray, which more overstated than understated comparison with scientifically generated ones.