The Voluntary Presentation of Value Added Statements in Australia: A Political Cost Perspective

This paper explores corporate management's incentive to voluntarily disclose Value Added Statements in their yearly financial reports. Adopting a political cost perspective, hypotheses relating Value Added Statement disclosure to labour intensity, corporate tax payments, rate of return, size and industry volatility are developed. Using a sample of Australian publicly listed companies, the results of our empirical testing support the hypotheses that the decision to voluntarily disclose Value Added Statements is related to a company's size (in terms of both market concentration and profitability), a proportional measure of tax payments and the industry to which it belongs. Labour intensity and rate of return were found to be unrelated to the voluntarily disclosure of Value Added Statements.