Financial Statement Footnote Disclosures-Purposes, Subject and Number: The Hong Kong Experience (Manuscripts‪)‬

ABSTRACT International financial markets are rapidly becoming a single global market. For these markets, most large institutional users are not satisfied with the existing levels of disclosures by multinational firms. One purpose of this research study was to investigate existing footnote disclosure practices for companies in Hong Kong. This study classified, summarised and analysed financial statement disclosures for Hong Kong companies. In a recent US study, Barth and Murphy (1994) developed a framework to analyse the required footnotes for companies in the United States. This study uses a similar approach to examine the situation in Hong Kong. However, there are some significant differences. The Barth and Murphy study is extended to include the review of actual disclosures in Hong Kong financial statements. In this way, this project attempts to determine if existing disclosures for Hong Kong companies can be classified according to the purposes identified in the US study and by a review of Hong Kong standards. Descriptive statistics are provided for all disclosures. The results indicate that similar purposes have been met for Hong Kong companies traded on the Hong Kong Stock Exchange.