Voluntary Disclosure, Interim reporting, Earnings volatility, Semiannual earnings disclosures

This paper discusses the problem of equity accounting for reciprocal stock-holdings. Alternative accounting treatments are presented. Illustrations of some of these alternatives are discussed which are drawn from actual practice in New Zealand. The treatments are classified and evaluated according to two broad underlying theories of equity accounting.

This paper examines the takeover charter amendments made by 128 firms listed on the New Zealand Stock Exchange. By December 31, 1995, firms were to have adopted one of three charter amendments that varied the timing and content of information required to be provided in takeover bids. The results show that after controlling for the probability of takeover and firm size, unaffiliated directors, representing blockholders, are associated with a less restrictive takeover amendment. We also find evidence that equity owned and controlled by executive and affiliated directors is related to the choice of takeover amendment. We find no relation between the choice of takeover amendment and the level of institutional shareholding, the proportion of public directors or the joint role of CEO and board chairman.