Document Type: Research Paper
Department of Accounting, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran.
Based on IFRS laws, British companies have started providing their reporting systems according to International Standards Requirements regarding disclosing their financial derivatives since January 2005. In 2013, Iran revised its Accounting Standard No. 15 to include the derivative instruments. The present study aims at investigating the effect of this revision on financial derivatives and instruments, and the effect of earning management on the relationship between the level of financial derivatives and instruments and risk-adjusted discount rates. From generalized least squares regression panel data, it was found that based on the first hypothesis, the companies which disclose their financial instruments based on No. 15 internal standard have a lower risk- adjusted discount rate, implying an increase in profit and a price rise in the markets. The findings also confirmed the second hypothesis, attesting to the effect of earning management on the relation-ship between financial derivatives and instruments disclosure and excess return. Findings of the research third hypothesis represent that there is a direct meaningful relationship between disclosure level of financial instruments and company value. So, it can be concluded that instruments` disclosures and financial derivatives can decrease risk-adjusted discount rate and increase companies` values in terms of standard number 15.