Financial reporting on corporate real estate: a study of the annual reports of non-investment companies listed on the New Zealand Stock Exchange (NZSE)

Abstract

Corporate Real Estate (CRE) is a significant asset, which has been shown to add value to businesses if it is efficiently and effectively managed. Globalisation of capital markets, advancements in technology and the current economic condition have again increased the awareness of the importance of CRE’s contribution. In order to be successful businesses need CRE to create and maintain their competitive edge in the marketplace. Advancement in terms of Corporate Real Estate Asset Management (CREAM) and the positive attitude shift of executives towards corporate real estate (CRE) have been made possible through research into the contribution CRE makes to a business’s bottom line. The objective of this study is to describe the financial reporting practices of companies (excluding investment companies) listed on the New Zealand Stock Exchange (NZSE) in order to reveal the current attitudes of management towards CRE. The results showed that information chaos exists behind the façade of the Balance Sheet, revealing that management have a surface level attitude and lack a real focus towards CRE assets. In New Zealand and overseas there is minimal literature that this study could build upon. The methodology involved an exploratory study of the 2008 annual reports; the results formed a snap shot of the current reporting practices of CRE and revealed the current attitudes of management in entities towards CRE.