Analysis of Kogan.Com's Voluntary Disclosures and Financial Reporting

This report provides a comprehensive analysis of two voluntary disclosures made by Kogan.Com, an ASX-listed company. The disclosures, concerning forward-looking information on strategy and shareholder details, are examined in relation to external sources and compared. The report then maps these disclosures against the fundamental qualitative characteristics of financial information, specifically relevance (including materiality) and faithful representation, as defined by accounting standards. The analysis highlights the absence of regulatory pressure for these disclosures, emphasizing the company's initiative to provide valuable information for stakeholders. The report concludes by emphasizing the importance of voluntary disclosures in enhancing the usefulness of financial information and recommends that Kogan.Com consider increasing the scope of its voluntary disclosures to cover more financial and non-financial areas to further assist users and stakeholders.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student
Name of the University
Author’s Note

1CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................3
Voluntary Disclosures.....................................................................................................................3
Comparison of Disclosure...............................................................................................................4
Fundamental Qualitative Characteristics.........................................................................................5
Conclusion and Recommendations..................................................................................................6
References........................................................................................................................................7

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Executive Summary
The report discusses about two voluntary disclosures made by Kogan.Com; they are forward-
looking information on its strategy and plans in the coming years and shareholders related
information. Analysis shows that there was not any regulatory or legislative pressure on
Kogan.Com to disclose this information as it has disclosed this information as it wanted to
provide additional material information to the users for assisting in their decision making
process. The presence of all three fundamental qualitative characteristics of financial information
can be seen in the voluntarily disclosed information of Kogan.Com and this makes this disclosed
information more useful to the users of financial statements.

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Introduction
Voluntary disclosure refers to the provision of information disclosed by the managements
of the companies beyond the requirements of applicable financial standards and regulations.
(Hamrouni, Miloudi and Benkraiem, 2015) These types of information is believed to be relevant
to the decision making process of the users. This report aims at discussing two voluntary
disclosures by an ASX listed company named Kogan.Com. This first part involves in discussing
two specific voluntary disclosures of Kogan.Com and then to compare them with external
sources. The second part of the report maps this information of voluntary disclosures of
Kogan.Com against the fundamental qualitative characteristics of financial information.
Voluntary Disclosures
The latest annual report of Kogan.Com shows the presence of two voluntary disclosures
in the forms of information on management and shareholders and strategic forward looking
objectives and they are shown below:
1. Forward-Information: FY20 & Beyond – Kogan.Com has disclosed the information on their
new product launches in the year 2020 in an explanatory manner. Moreover, the company has
also mentioned about their future aim to expand their product portfolio in the coming years
through selective and opportunistic merger and acquisitions. The company has also mentioned
about their growth business strategy in this section which is a crucial part to consider
(kogancorporate.com, 2020).
2. Shareholder Information – In this section, Kogan.Com has disclosed information on its
number of holders of equity securities, distribution of equity securities, name as well as

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percentage of equity security holders, substantial security holders, voting rights, stock exchange
listing, and unquoted securities, securities that are subject to voluntary escrow and on market
buy-back (kogancorporate.com, 2020).
Comparison of Disclosure
The components that can be included in the voluntary disclosures of the companies are
information on characteristics of company along with its strategies, different non-financial
information like sustainability information, financial information such as information on the
shareholders and forward-looking information (Hamrouni, Miloudi and Benkraiem, 2015).
Disclosed information of Kogan.Com on its strategy and product launches can be categorized as
forward-looking information and information on shareholders can be categorized as share
information. The main reason for considering this information as voluntary disclosure as there is
not any obligation on Kogan.Com for disclosing this information in the annual report, it is the
extra initiative of the company’s management to disclose this information so that the users like
investors, creditors, lenders and others can know about them and can obtain necessary
information for making respective decisions (Alfraih and Almutawa, 2017). At the same time,
the influence and demands of the key stakeholders of the business organizations lead to
voluntary disclosures by the company. For example, disclosing the forward-looking information
by Kogan.Com might be demand of the key stakeholders to disclose information on its future
strategies, vision and product launches (Hamrouni, Miloudi and Benkraiem, 2015). All
information associated with voluntary disclosure create positive influence on the decision-
making process of the users and stakeholders, there is not any legislative as well as regulatory
obligations on the company to disclose this types of information in the annual report. However,
the managements of the companies have to bear the disadvantages associated with voluntary a

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disclosure which is the high cost of procuring information that needs to be disclosed under
voluntary disclosers (Hieu and Lan, 2015).
Fundamental Qualitative Characteristics
There are two fundamental qualitative characteristics of financial information; they are
Relevance that includes Materiality and Faithful Representation (Scorţe, Sorin and Luminita,
2015). These are discussed below in respect to the voluntary disclosure of Kogan.Com:
Relevance – Information is capable in making difference in case it is relevant and relevance can
be enhanced through providing an evaluation of past, present and future events. Users can
ascertain the information provided under Kogan.Com’s voluntary disclosures for the present and
past years through considering the last two years annual report of the company. In addition,
information disclosed under the firm’s voluntary disclosures is useful as well as relevant for the
decision-making process of the users (Nobes and Stadler, 2015). For example, the company has
disclosed the amount of total share capital in both 2019 and 2018 annual reports; they are
$167,822,590 in 2019 and $167,293,634 in 2018. Investors and other users use this information
for making respective decisions about the company; and both present and past year information
on share capital has been provided to them. They can obtain additional information on share
capital from the company’s voluntary disclosure.
Materiality – Companies should include information that is material to the decision-making
process of the users and omitting this information affects the decisions made. Information
disclosed by Kogan.Com under voluntary disclosures is crucial in nature and they are also
material. For example, an investor has to consider the shareholder information before making
investment decision and absence of this information affects their judgment. For example, careful

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consideration of 2019 and 2018 annual reports of Kogan.Com show that the share capital of the
company has increased in 2019 as compared to 2018; that is from $167,293,634 in 2018 to
$167,822,590 in 2019. This is a material change that needs to be considered by the investors and
other users. At the same time, they can make better decisions when they know about the
company’s future plans and strategies (Scorţe, Sorin and Luminita, 2015).
Faithful Representation – Disclosed information must be presented faithfully by expressing the
numbers and descriptions associated with the economic phenomena and the same aspect can be
seen in case of Kogan.Com. The company has provided an explanatory description of the
forward-looking statement including facts on plans and strategies. Moreover, it has also
disclosed all the shareholders related financial information including numbers in the section
(Felix and Rebecca, 2015). For instance, the consolidated statement of financial position in 2019
and 2018 annual reports show the values of share capital that are $167,822,590 in 2019 and
$167,293,634 in 2018. In addition, the section named shareholder’s information in both the
annual reports of 2019 and 2018 shows the additional information on share capital.
Conclusion and Recommendations
The above analysis shows that the main reason for the companies behind voluntary
disclosure is to provide additional material information to the users so that it can assist them in
their decision-making process. Moreover, the presence of qualitative characteristics increases the
usefulness and value of the information disclosed. Since, there is not many voluntary disclosure
made by the management of Kogan.Com, the recommendation to the company is to increase the
amount of voluntary disclosure by taking into account more crucial both financial and non-
financial areas. This will provide major assistance to the users and stakeholders.

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References
Alfraih, M.M. and Almutawa, A.M., 2017. Voluntary disclosure and corporate governance:
empirical evidence from Kuwait. International Journal of Law and Management.
Felix, U.O. and Rebecca, U.I., 2015. Theory of Conservatism and Value Relevance of
Accounting Information. Journal of Accounting & Marketing.
Hamrouni, A., Miloudi, A. and Benkraiem, R., 2015. Signaling firm performance through
corporate voluntary disclosure. Journal of Applied Business Research (JABR), 31(2), pp.609-
620.
Hieu, P.D. and Lan, D.T.H., 2015. Factors influencing the voluntary disclosure of Vietnamese
listed companies. Journal of Modern Accounting and Auditing, 11(12), pp.656-676.
Kogancorporate.com. 2020. ANNUAL REPORT 2018. [online] Available at:
https://www.kogancorporate.com/resources/pdf/library/5.%20KOG0006%20Kogan
%20AR18.pdf [Accessed 31 Mar. 2020].
Kogancorporate.com. 2020. ANNUAL REPORT 2019. [online] Available at:
https://www.kogancorporate.com/document/c1ad8c5dffd74c6a8cbca256e0ce1146/1.%20KOG00
08%20Kogan%20AR19_ASX.pdf [Accessed 31 Mar. 2020].
Nobes, C.W. and Stadler, C., 2015. The qualitative characteristics of financial information, and
managers’ accounting decisions: evidence from IFRS policy changes. Accounting and Business
Research, 45(5), pp.572-601.

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Scorţe, C.M., Sorin, B. and Luminita, R., 2015. The Importance Of The Qualitative
Characteristics Of Accounting Information For Decision Making. Empirical Study Conducted In
The Hospitality Industry In Romania. The Annals Of The University Of Oradea, p.1357.