Reporting of value added in Singapore : why or why not?

• Main Authors: Law, Seng Keat, Lim, Adrian Ek Duen, Tan, Winnie Wei Ling
• Other Authors: Zubaidah Ismail
• Format: Final Year Project
• Language: English
• Published: 2015
• Subjects: DRNTU::Business::Accounting
• Online Access: http://hdl.handle.net/10356/63029
• Institution: Nanyang Technological University

It has been ten years since the introduction of Statement of Recommended Accounting Practice No. 3 (RAP 3), which recommended VA disclosure in financial statements. Value Added (VA) information displays the total contribution of efforts, i.e. value added, by a company as a whole and the distribution of this value to its various contributors, i.e. , shareholders, management, creditors and employees. However, there has been poor response to the Institute of Certified Public Accountants of Singapore's (ICPAS) call to incorporate VA information by public companies. However, the reasons for this observation has yet to be explored in the Singapore context. This study provides an update on the progress of VA disclosure in Singapore by examining the extent of disclosure of VA information. It also examines the relationship between corporate characteristics and VA disclosure. In addition, this study provides insights as to the reasons for companies' disclosure or non-disclosure of VA information in their financial reports. Companies' annual reports were examined to evaluate the extent of VA disclosure. Questionnaires were sent to public listed companies and supplementary questionnaires were also sent to employee unions and financial analysts to obtain their views on VA information. Their views were sought in order to further explain companies' VA disclosure. This study confirmed that the level of VA information disclosure is increasing though it is still low in Singapore. It was discovered that there was a significant positive relationship between the disclosure of VA information and the size of the companies. Further tests concluded that the size of a company was positively related to the likelihood of disclosure of VA information. The study was unable to conclude that there was a relationship between disclosure of VA information and company membership in business sectors. On the whole, companies seemed reluctant to disclose VA information. The main reasons for the lack of response towards RAP 3 stem from the fact that companies lack knowledge in respect of VA disclosure. With a better understanding of the problems and apprehensions faced by the companies, the ICPAS could look into ways to redress the situation . It can do this by research, education and having detailed and clearer guidelines.