Inconsistencies in the Disclosures of Discount Rates

Abstract

The use of the discount rate within financial reporting deserves particular attention from international standard-setting bodies because it has achieved prominence over time. This chapter uses archival research as a method and content analysis as a technique to assess mandatory and voluntary disclosure levels related to discount rates. The consolidated accounts for the year 2020 of listed entities in Euronext Lisbon are the sources of information. The results show differences in mandatory and disclosure levels regarding IAS/IFRS under analysis. Disclosures related to discount rates have been assessed either as an incidental topic or from a limited-scope analysis. Therefore, understanding the proper set of items to be disclosed and the factors that explain its disclosure, aligned with the efforts to ensure its compliance by legal authorities, may reduce asymmetries and enhance transparency in entities' financial reporting.