Fair value accounting

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The study examines in-depth the role of International Financial Reporting Standards (IAS/IFRS) and their applications in enhancing the quality of integrated reporting for Iraqi commercial banks. The study began by discussing the importance of adopting these standards in unifying accounting procedures and preparing financial reports according to recognized international frameworks and standards, which contributes to raising the level of transparency and reliability of financial information provided by banks. The study indicated that the implementation of international accounting standards in Iraq was a response to several challenges, such as a lack of transparency and weak disclosure in the banking sector prior to 2003, where there were clear deficiencies in the quality of financial statements provided. With the increasing implementation of these standards, the quality of data and disclosures has improved, helping to provide more accurate and reliable reports to various users of financial reports, including investors, auditors, and other stakeholders. The study focused on International Financial Reporting Standard (IAS) 1, one of the most important financial reporting standards, which promotes relevance, consistency, fair representation, and comparability. This enhances the quality of financial reports for Iraqi banks and more accurately reflects the reality of financial performance. The study also discussed the IFRS9 standard for financial instruments and highlighted the challenges facing Iraqi banks in implementing this standard, given its complexity and the fair value requirements for evaluating financial assets, which directly impact equity and financial statements. Through surveys and data analysis from a sample of Iraqi banks, the study revealed that implementing these standards faces obstacles such as a lack of technical capacity and human resources, high implementation costs, and the need for support from regulatory and governmental bodies to overcome these obstacles. However, there is widespread appreciation for the motivations for adopting these standards, such as improving disclosure and transparency and helping build a strong financial reputation for banks inside and outside the Iraqi market.

Al fine di individuare le possibili vie di sviluppo degli strumenti utilizzabili per misurare, gestire e controllare il rischio di credito si è tentato di definire i contorni di un approccio integrato che tenga conto delle principali dimensioni del rischio.
In questa esposizione verranno dapprima brevemente riassunte alcune considerazioni sui diversi approcci alla misurazione del rischio credito e poi sarà esemplificato il calcolo di un VaR integrato (finanziario e creditizio).

Le risposte del prof. Emilio Barone alle vostre domande sul mondo della finanza
1 Azioni (1.1 Azioni e Attività Reali, 1.2 Volatilità, 1.3 Restricted Shares)
2 Obbligazioni Convertibili (2.1 Un Corporate Strucure Model)
3 Fondi Comuni d’Investimento (3.1 Fondi Etici, 3.2 Exchange-Traded Funds, 3.3 Benchmarks, 3.4 Commissioni d’Incentivazione, 3.5 Dinamica delle Quotazioni)
4 Derivati (4.1 Leverage e Coperture, 4.2 Prezzi Forward e Prezzi Futures, 4.3 Covered Warrants4.4 Futures e Opzioni su Valute, 4.5 Swap Spread)
5 Selezione di Portafoglio (5.1 Approccio Media-Varianza, 5.2 Azioni o Obbligazioni?, 5.3 Orizzonte Temporale, 5.4 Market Timing, 5.5 Assicurazione di Portafoglio, 5.6 Strategie Contrarie, 5.7 Valore a Rischio)
6 Mercato Secondario (6.1 Offerte Pubbliche di Vendita, 6.2 Efficienza del Mercato Azionario)
7 Congiuntura (7.1 Interventi sui Mercati Azionari, 7.2 Keynes e il Concorso di Bellezza, 7.3 Purchasing Management Index (PMI))

Questo lavoro, che prosegue le analisi contenute in un precedente scritto pubblicato nel dicembre del 1988, contiene innanzitutto un aggiornamento del quadro normativo previsto per il mercato dei contratti a premio su titoli azionari per quanto attiene sia alle nuove disposizioni della Consob sia alle modifiche intervenute sotto il profilo fiscale. Seguono quindi alcune informazioni di carattere statistico sulle dimensioni del mercato e sull’evoluzione congiunturale registrata negli ultimi anni. Dopo aver descritto gli standard utilizzati dagli operatori per la valutazione dei premi e quantificati gli scostamenti rispetto a quanto viene suggerito dalla teoria, il lavoro si sofferma sulle tecniche di previsione della volatilità dei prezzi azionari, verificando il contenuto informativo delle volatilità implicite nei contratti a premio. Il lavoro si conclude con un’estesa simulazione, che tenendo conto dei costi di transazione, pone in luce le opportunità di arbitraggio non sfruttate dagli operatori nel periodo in esame.

Per una versione aggiornata si veda Barone, E., & Cuoco, D. (2005). Un’altra visita al mercato dei premi. In Barone, E. (a cura di),  Economia del Mercato Mobiliare, Vol. 2 - Derivati e Risk Management, 2005, Capitolo 4, pp. 103-136. Luiss University Press.

Secondo quanto previsto dal Comitato di Basilea per la vigilanza bancaria, a partire dalla fine del 1997, o prima se così prescriveranno le rispettive autorità di vigilanza, le banche saranno tenute a misurare e applicare requisiti patrimoniali a fronte dei rischi di mercato, oltre che dei rischi di credito. Il Comitato di Basilea ha proposto una propria - semplificata - metodologia per il calcolo dei rischi di mercato (“metodo standard”), ma ha riconosciuto alle banche la possibilità di utilizzare sistemi di misurazione sviluppati al proprio interno (“modelli interni”). In questo lavoro, dopo aver richiamato le condizioni previste a livello normativo per l’utilizzo dei modelli interni [tra cui la specificazione dei fattori di rischio di mercato, i criteri quantitativi (inclusi i test retrospettivi) e le prove di stress], viene presentato un modello generale in tempo continuo. In quest’ambito vengono determinate le misure di volatilità e di “turbolenza” che rappresentano gli strumenti sintetici per monitorare la rischiosità di un portafoglio. Ci si sofferma quindi sul significato di Var (“Valore a rischio”), di cui si propone un’approssimazione analitica, e si ricordano i motivi (tra cui l’evidenza empirica contraria all’assunzione di normalità) che hanno indotto il Comitato di Basilea a prevedere un fattore di moltiplicazione del Var per fissare il requisito patrimoniale a fronte dei rischi di mercato. Il Var viene poi confrontato con il valore di un’opzione Put che garantisca un livello minimo di patrimonio netto. Si auspica quindi che l’attuale regolamentazione si evolva verso un approccio integrato che determini coerentemente il valore del portafoglio e la sua volatilità in funzione dei fattori finanziari e creditizi (e della concentrazione delle esposizioni verso determinati settori/prenditori di fondi). Il lavoro si chiude con la presentazione di alcune applicazioni che mostrano come l’approccio proposto possa essere attuato in pratica.

Per una versione aggiornata si veda Barone, E., & Braghò, A. (2005). Un modello per la misurazione dei rischi finanziari. In Barone, E. (a cura di),  Economia del Mercato Mobiliare, Vol. 2 - Derivati e Risk Management, 2005, Capitolo 13, pp. 371-400. Luiss University Press.

Atti di Convegno. Per una versione liberamente disponibile, si veda l'omonimo WP,  2000.

Citazione suggerita: Barone, E. (2000). Alcune analisi in corso presso il Sanpaolo IMI. In Banca d'Italia (a cura di), Modelli per la gestione del rischio di credito - I "ratings" interni, aprile 2000, pp. 47-56.

Lo studio intende offrire un contributo al tema della valutazione delle azioni e investe pertanto i problemi della corretta procedura contabile per la determinazione degli utili, della scelta dei proventi da attualizzare (dividendi o utili), dell’individuazione dell’appropriato tasso di sconto. Questa vasta problematica è stata resa particolarmente complessa negli ultimi anni dall’accentuazione del fenomeno inflazionistico. Lo studio ipotizza che il valore dell’azione sia funzionalmente legato a due variabili, il tasso di sconto e i dividendi attesi. Esso si incentra quindi nella formulazione e nella stima di un modello di dividendi attesi: i dividendi attesi dipendono dai dividendi passati e dagli utili correnti. La stima, condotta per il periodo 1966-1977 sulle società del campione Banca d’Italia, ha permesso di valutare il processo di determinazione dei dividendi e di misurare il tasso permanente di variazione degli utili correnti, una volta scelto un appropria to tasso di sconto. Lo studio, inoltre, analizza le connessioni logiche tra tassi d’inflazione, risultati di bilancio e struttura patrimoniale delle imprese, rilevando che gli utili contabili tendono a sottostimare gli utili “veri” quando un tasso d’inflazione accentuato si associ a un leverage elevato.

Citazione suggerita: Barone, E., & Cristini, G. (1980). Corsi delle azioni e dividendi attesi: verifica empirica per un campione di società italiane. Temi di Discussione del Servizio Studi n. 4. Banca d'Italia, 31 ottobre1980. Versione editoriale disponibile a https://www.bancaditalia.it/pubblicazioni/temi-discussione/1980/1980-0004/index.html.

Per una versione aggiornata si veda Barone, E., & Cristini, G. (2005). Corsi delle azioni e dividendi attesi: una verifica empirica. In Barone, E. (a cura di),  Economia del Mercato Mobiliare, Vol. 1 - Azioni e Obbligazioni, 2005, Capitolo 6, pp. 197-232. Luiss University Press.

From its experience in providing financial information for investigating the application of trade remedies within the framework of the WTO [11], Vietnam has policies to cooperate internationally in accounting and auditing to approach international accounting standards. The Law on Independent Auditing 2011 and the Law on Accounting 2015 stipulate international cooperation policies for investment in accounting and auditing in 3 forms: (1) establishing branches of foreign enterprises providing accounting and auditing services in Vietnam; (2) contribute capital with Vietnamese accounting and auditing enterprises to establish accounting and auditing enterprises; (3) provision of cross-border services. The article analyzes conditions and recommends investment plans for provision of accounting and auditing services of foreign enterprises in Vietnam.

This study is the first that investigates the value relevance of SFAS 71 within the banking sector, especially relating to the role of the new accounting standards in reducing the problem of information asymmetry due to bank asset opacity. Using samples consisting of 41 listed banking firms from 2016 to 2020, this study shows that the empirical relationship between the initial implementation of SFAS 71 and bank equity value is inverse U-shaped or concave and that bank size has a negative moderated effect on the relationship between the initial implementation of SFAS 71 and bank equity value. These findings indicate that: (i) at low levels of retained earnings adjustments due to the initial implementation of SFAS 71, the disclosure effect brought by the new accounting standards has a positive relationship with bank equity valuation, (ii) at higher levels of adjustments beyond those previously anticipated by capital market investors, the substantial effect of the new accounting standards has a negative relationship with bank equity valuation, and (iii) larger banks have more opaque assets and therefore suffer more significant valuation discounts due to the substance effect.

Since the 2008 global economical and financial crisis, the fair value measurement has acquired a controversial position both within the accounting regulatory committees and the accounting theory. The literature generally examines two opposite central paradigms of evaluation, namely the Fair Value Accounting (FVA) and the Historical Cost Accounting (HCA). The paper, after a literature review through both these opposite sides, suggests a theoretical framework, using the basic concept of “accounting system”, for the choice between the opposite paradigms, considered noteworthy in times of crisis as it should allow to conceptualize a ‘mixed system’, combining FVA and HCA in different ways according to the different contexts and entities reported by the financial statements.

We are grateful for helpful comments and suggestions from Orie Barron, Jeffrey Callen, Henock Louis, Katherine Schipper and conference participants at the 2012 American Accounting Association Annual Meeting. We greatly appreciate the research assistance of Cheong Hui Shan and Eunice Yeo and the financial support from Singapore Management University. All errors are our own.

We discuss the expansion of Norwegian banks abroad in the post-World War II era. The Norwegian case gives us an opportunity to examine the determinants of the strategies that banks from a small county have followed in their international expansion. At least two issues emerge as important. The first issue is the role of regulation as goad and handicap to internationalization. Regulations influenced when, where, how and why the Norwegian banks expanded abroad. The second issue is the role of the competition and cooperation (including joint ventures) between banks.

This technical memorandum provides a comprehensive IFRS-based solution to the NovaVerse PlayWorks PLC case study, which explores complex, interconnected financial reporting issues faced by a multinational edtech-toy conglomerate. The memo applies relevant International Financial Reporting Standards (IFRS) to twelve advanced accounting scenarios, including fair value measurement of cryptocurrencies, lease accounting with embedded derivatives, climate-driven asset impairments, ESG expenditures, contingent consideration, inventory fraud, and revaluation strategies.

Each issue is addressed with reference to the appropriate IFRS/IAS pronouncements, supported by journal entries, disclosure guidance, and covenant impact analysis. The solution document is designed for postgraduate accounting students, finance educators, auditors, and IFRS practitioners seeking a deep application of accounting standards in a simulated corporate context.

This document can serve as both a learning tool and a teaching case, bridging technical accounting interpretation with governance, ethics, and strategic financial decision-making.

This case study presents a comprehensive financial reporting scenario for NovaVerse PlayWorks PLC, a fictional but realistically constructed multinational edtech-toy conglomerate. It is designed to challenge advanced learners, researchers, and practitioners of International Financial Reporting Standards (IFRS) by integrating a spectrum of real-world complexities faced by global companies.

Spanning twelve interrelated financial issues, the case explores critical topics including fair value accounting of cryptocurrencies, index-linked lease liabilities, climate-induced asset impairments, ESG-related expenditures, revaluation strategies under IAS 16, contingent consideration in acquisitions (IFRS 3), and embedded derivatives within sukuk instruments. It also addresses high-risk areas such as inventory fraud, related-party disclosures (IAS 24), uncertain tax positions (IFRIC 23), and the implications of hyperinflationary indicators (IAS 29).

This case is supported by journal entries, IFRS references, and ratio analysis, making it suitable for postgraduate accounting coursework, ACCA/CA-qualification training, or IFRS workshops. It encourages judgment-based thinking, critical application of standards, and awareness of ethics and governance in financial reporting.

Many accounting regulations are introduced in response to crises of some kind, arising from a corporate collapse or claims that published financial reports have been misleading. In contrast, the IASC's IAS 41 Agriculture standard was developed from the mid-1990s and issued in 2000, two years after the Australian AASB 1037 Self-Generating and Regenerating Assets (SGARA) standard, followed in 2004 by New Zealand's NZ IAS 41 Agriculture. There had been no prior crisis or public expression of concern about shortcomings in existing practice. This study considers the background to the emergence of accounting for agriculture onto the agenda of standard-setting bodies, and the role played by different insiders. Here, they are collectively termed 'gatekeepers', the key staff, expert technical advisers and decision-makers who were members of standard-setting boards. Examination of the development of these new standards extends beyond consideration of technical accounting issues. Several case studies identify the regulatory and political processes each standard-setting agency adopted to consider and then progress the topic through all rule-making stages and resulting lobbying activities by significant users. These political processes are examined using the Cobb and Elder (1972, 1983) agenda-building framework and the Cobb, Ross and Ross (1976) analysis of institutional dynamics. The history of accounting for agriculture, in Australia and New Zealand, is traversed to explain the historical background to the new omnibus agricultural standards promulgated in Australasia. Significant events described include the AASB staff recommendation to the IASB in 2003 to split IAS 41 in two before its designated 2005 commencement date -a recommendation which, so far, has been ignored. Project Brief and IASC Point Outline background proposals for each standard, the IASC's Field Test Report prior to adopting its IAS 41 standard and the AASB 1037 standard post implementation review -possibly the first ever to be undertaken. The study found that the activities of key insiders were consistent with what Cobb et al. (1976) described as the inside access model, both in placement of the topic on the agenda iii and then subsequent incorporation of proposals for fair value accounting for agriculture. A feature of the events described in this study was the interaction between the different standard-setting bodies -a possibility little-described in the accounting literature, and arguably a significant element in the manner in which standards were considered and developed by the IASC, and latterly the IASB. Overall, a combination of intra-and inter-agency lobbying resulted in compromise reflected in the final text of IAS 41. This modified the full fair value accounting proposal. The study found that gatekeepers paid little regard to submissions from experienced industry representatives, accountants, academics and other commentators world-wide. Practical evidence from parties concerning the utility of the proposed new rules was requested too late to influence the content of the final IAS 41 standard. Not surprisingly, the standard is still controversial.

Enhanced transparency and consistency in financial reporting have led to better-informed decision-making by investors and other stakeholders. The current study emphasized the impact of the adoption of converged IFRS/ Ind AS on the financial position of the company in India. The study has used the cash flow position ratios (i.e., cash flow to sales ratios, cash flow assets ratios, and operating cash flow to profit ratios) and equity shareholding positions (i.e., adjusted earnings per share and adjusted cash earnings per share) of 12 NSE-listed companies along with the pre-period of the adoption from 2011-12 to 2014-15 and the post-period of the adoption from 2016-17 to 2017-18, which are collected from the annual report of the companies. By employing a paired t-test, the study found that the adoption of converged IFRS has no impact on the cash flow positions and equity shareholding positions.

Keywords: IFRS, Cash Flow Positions, Equity Shareholding, Financial Reporting, Transparency, Convergence

The purpose of this paper is to study a totally contact umbilical contact CRlightlike submanifolds of an indefinite para-Sasakian manifold. In this paper, we prove that a totally contact umbilical CR-lightlike submanifold is totally contact geodesic. Further, we obtain a necessary and sufficient condition for a CR-lightlike submanifold to be anti-invariant submanifold. Finally, we obtain the integrability condition of distributions and also characterize a contact CR-lightlike submanifold of indefinite para-Sasakian manifold to be a contact CR-lightlike product.

The purpose of this paper is to study a totally contact umbilical contact CR- lightlike submanifolds of an indefinite para-Sasakian manifold. In this paper, we prove that a totally contact umbilical CR-lightlike submanifold is totally contact geodesic. Further, we obtain a necessary and sufficient condition for a CR-lightlike submanifold to be anti-invariant submanifold. Finally, we obtain the integrability condition of distributions and also characterize a contact CR-lightlike submanifold of indefinite para-Sasakian manifold to be a contact CR-lightlike product.

Fair value accounting continues to be a topic of significant interest and debate among the preparers and users of financial information. Fair value continues to be an important measurement basis in financial reporting. It provides information about what an entity might realize if it sold an asset or might pay to transfer a liability. In recent years, the use of fair value as a measurement basis for financial reporting has been expanded, even as the debate over its usefulness to stakeholders continues. Determining fair value often requires a variety of assumptions, as well as significant judgment. Thus, investors desire timely and transparent information about how fair value is measured, its impact on current financial statements, and its potential to impact future periods. There are numerous items for which fair value measurements are required or permitted. ASC 820 and IFRS 13 ("the fair value standards") provide authoritative guidance on fair value measurement. The increased use of fair value requires companies to refresh measurement policies and procedures. Companies should analyze how fair value is determined when no active market exists, and establish procedures to develop the appropriate disclosures. Valuation professionals may need to be involved early in the process. Appropriate and robust disclosures in the financial statements are necessary to inform investors about measurement methods and uncertainty. The increasing needs for disclosures may require the establishment new processes and databases to record and report the information.

This study examined the view of stakeholders as to whether or not Fair Value Measurement (IFRS 13) increased disclosure will lead to more meaningful investment decisions. The study adopted the Survey research design involving the collection of data from auditors of the “Big 4” and accounting academics in selected private universities in Nigeria. Primary data were obtained through the administration of copies of survey questionnaire to respondents. Two hypotheses were formulated and tested using Peason Product Moment Correlation and Independent Sample T-test at a significant level of 5%. Findings from the study revealed an association between IFRS 13 increased disclosure requirement and investment decisions. The result also revealed differences in the standpoint of accounting academics and auditors regarding the impact IFRS 13 increased disclosure have on investing decisions. The study recommended that the Financial Reporting Council of Nigeria should ensure that all companies in Nig...

When liabilities are accounted for at fair value, a deterioration of a company's credit risk results in the reporting of an income statement gain; an improvement in a company's credit risk results in a loss. Many argue that these income statement effects are counterintuitive and that financial statement-users are likely to misinterpret fair value gains as positive signals and fair value losses as negative signals. Utilizing an experiment with CPAs as participants, we find that these arguments are indeed valid. Specifically, we find that over 70% of the participants incorrectly assess a company's credit risk as improving (deteriorating) when a fair value gain (loss) is recognized. We also find that disclosures that explicitly specify the relation between the direction of the credit risk change and the income statement effect significantly reduce participants' misinterpretations, and are more beneficial when fair value gains versus losses are recognized. These findings provide empirical evidence in the debate over the recognition of company-specific credit risk changes and offer direction for improving disclosures in the area of fair value accounting.

La valorisation du capital marque en tant qu'actif incorporel suscite un grand débat à la fois dans le monde académique et chez les praticiens. Face à l'absence de reconnaissance en comptabilité des marques générées en interne, la divulgation d'informations complémentaires pourrait être la solution la plus adéquate pour informer le marché sur la valeur de ces actifs incorporels. Toutefois, le grand nombre de méthodes d'évaluation financière des marques et l'absence d'un consensus sur l'utilisation d'une approche commune rendent la diffusion et l'acceptation de la valeur financière des marques comme un critère d'évaluation des entreprises sujettes à de nombreuses difficultés. Cet article étudie la pertinence de la valorisation financière des marques et son impact sur la capitalisation boursière des entreprises qui les possèdent. Sur la base d'un échantillon de 153 observations représentant les valeurs des principales marques internationales valorisées sur trois années successives (2007-2008-2009) par deux organisations spécialisées et indépendantes (Interbrand et Brand Finance), les résultats de notre étude démontrent la pertinence des valeurs des marques communiquées par ces deux organismes. Par ailleurs, une différence statistique apparaît lors d'une étude comparative démontrant une pertinence plus importante d'une méthode de valorisation des marques sur l'autre.

This article examines how listed companies in Peru and Chile have applied the measurement and disclosure criteria for biological assets under IAS 41. Additionally, it seeks to determine the influence of variables such as country, type of audit firm, nature of the biological asset, investment in biological assets, company size, and profitability on these measurement criteria and disclosure levels. We used a quantitative approach, a descriptive-relational crosssectional study on the 2021-2022 financial statements, and a content analysis of the annual reports and Chi-Square, one-factor ANOVA, and Pearson correlation tests to test our hypotheses. The findings demonstrate that neither the country, type of audit firm, nor the type of biological asset impacted the measurement model. The disclosure level primarily includes descriptions of biological assets, agricultural activities, and financial risks; it is higher for Chilean companies and those audited by the 'Big Four' audit firms. There was a significant correlation between investment in biological assets and profitability with the level of disclosure, which is higher for companies with substantial investments in biological assets that seek greater transparency with their investors and creditors in their investment decisions.

The main objective of this study is to investigate whether developments in financial reporting following the international financial reporting standards adoption resulted in financial statement information being more value relevant over time. This study focuses solely on quantitative methods and employs secondary data in addressing the research questions. The relevance of fair value revaluation has been investigated by studying its association with firm's future performance, measured by its operating income and operating cash flow. The theoretical framework of (Aboody et al., 1999) have been used to examine this relationship. A sample of Jordanian firms (consisting of commercial banks and real estate companies) listed in the Amman stock exchange during the 2008–2011 times period has been used. Our findings, based on multiple regression analysis showed that, firm's future performance measured by operating income or operating cash flow is significantly positively associated wi...

Following the theories of gray and positive accounting this study examines the options in the measurement of assets and the usefulness of fair value. Using a sample of 104 Portuguese and Spanish companies with listed securities, the research analyzes factors associated with the fair value option and whether the listing incorporates this information. The results reveal a conservative behavior, where only 19% of companies use the fair value, specially the Portuguese (35%), confirming that the country of origin has a significant influence on this choice. The fair value option is more expressive on investment properties, and less expressive in intangibles. The sectors denote significantly different behaviors, and companies with higher quotes are more cautious using the fair value. The market reacts differently about the nature of this information. It is favorable to its sectorial utilization, reacting negatively to a more widespread use (Portugal), which supports the argument that the r...

In this study, we compare the value relevance of two measures of earnings per share ; the level of Domestic earnings per share measures (Domestic EPS) co mputed with reference to the Glossary of the Tunis Stock Exchange by dividing accounting earnings by the number of shares that compose capital at the end of the fiscal year to the level o f Basic earnings per share measures (Basic EPS) based on International Accounting Standard (IAS 33 'earnings per share') co mputed by dividing 'Profit attributable to the ordinary shareholders' (the numerator) by 'the weighted-average number of ordinary shares in issue' (the denominator). Based on a sample of 389 firm years for firms listed on the Tunis Stock Exchange (TSE) during the period 1997-2008 and using pooled regressions, we find that although there is little difference between the two types of earnings measures, Domestic EPS are mo re associated to security returns and that the adjusted earnings per share to International Accounting Standards, resulting in Basic EPS, does not improve the relationship between earnings and security returns. Therefore, the use of the weighted-average number of ord inary shares in issue as denominator does not imp rove significantly the relationship between security returns and accounting earnings in Tunisian context. Fu rther tests show that the use of alternative measures of performance and/or the change of earnings variables does not imp rove the exp lanatory power of earn ings measures.

There is an increasing recognition that annual reports need to better disclose the risks facing a company. Provision of a defined benefit scheme poses one of these risks as companies take on uncertain long term obligations to make future pension payments. This report addresses the issue of how companies should report this risk so that stakeholders can understand a company's exposure to pension risk. As well as providing an analysis of current defined benefit pension scheme risk disclosures by FTSE 100 companies, the report provides examples of current practice and suggests best practice for the future. The authors also make recommendations to the International Accounting Standards Board (IASB) on its current IAS 19 exposure draft and to the UK Accounting Standards Board (ASB). This project was funded by the Scottish Accountancy Trust for Education and Research (SATER) (for further details see page 49). The Research Committee of The Institute of Chartered Accountants of Scotland (ICAS) has also been happy to support this project. The Committee recognises that the views expressed do not necessarily represent those of ICAS itself, but hopes that the project will assist the standard setters in their deliberations on pension risk reporting requirements and guidance.

This paper examines the ways of providing information that will enhance the valuation role of accounting while not creating significant problems for its contracting role. Until the global financial crisis beginning in 2008, the accounting standards setters have gradually expanded the scope of fair value accounting. We examine the impact of the expansion of fair valuation on the use of accounting in contracts (private contracts and public regulations) and derive some hypothetical conclusions. First, there will be no significant problems in the contracting role of accounting, if information in the body of financial statements used directly in contracts is able to be revised and adjusted in a way that eliminates unrealized profit and valuation profit or loss with room for management estimation and discretion. Second, if one uses the standard of differences in business models to distinguish, from the perspective of the valuation role, between assets and liabilities subject to fair value measurement and assets and liabilities subject to cost-based measurement, there is considerable overlap between information that plays the valuation role and information that plays the contracting role. Finally, it is also found desirable that risk information, corporate governance information, and other similar information that is useful in contracts but has low verifiability be provided in the form of footnote information, etc. that supplements and complements information in the body of financial statements.

The research aims to demonstrate the impact of applying this measurement in improving the transparency of financial reporting and its application in Iraqi companies. A high level of transparency in the financial statements has been shown. It has been concluded that the level of transparency of the financial statements when choosing the fair value measurement is higher than the level of transparency when choosing the historical cost measurement, which helps in comparing the financial statements of the different economic units, and that the basis of comparison between it and the measurement based on Historical cost is to achieve the required amount of appropriateness characteristic and honest representation.

better predictor of future net income relative to comprehensive income. Our findings suggest that mandating all Canadian firms to adopt the new accounting standards is expected to enhance the usefulness of financial statements. Our findings, therefore, should be of interest to Canadian accounting policy makers as they provide ex-ante evidence on the potential usefulness of mandating firms to report comprehensive income and the components of other comprehensive income in their financial statements.

Productive biological assets hold a special place in agricultural companies. A biological asset is a living animal or plant, such assets being included, from the accounting point of view, in the structure of tangible assets. We seek to present, in the pages of this article, the main aspects related to their recognition, assessment and accounting, combining the theoretical and the empirical research . We will make an incursion in the specialised literature and we will present the peculiarities of the accounting of the biological assets. The considerations underlying this article also take into account the fact that the productive biological assets are accounting structures approached in this field relatively recently, but, as we will prove herein, important for any agricultural unit.

Las Normas Internacionales de Contabilidad y de Información Financiera establecen que tanto los recursos como las obligaciones de una entidad deben ser presentadas, en los respectivos estados financieros, a su Valor Razonable, estableciéndose para ello, de acuerdo a su naturaleza y características, métodos de valuación así como el tratamiento de las diferencias que se produzcan entre el Valor Razonable determinado y el Valor en Libros. Dado este contexto el objetivo de este trabajo es revisar los métodos de valuación a Valor Razonable establecidos en las distintas Normas Internacionales de manera de desarrollar un modelo genérico de valuación de los recursos (obligaciones) tanto desde una perspectiva individual como de la sinergia que se producen al utilizarlos en conjunto e incorporando los objetivos de revisión del auditor de los estados financieros. Al concluir, se destaca que las normas contables hacen hincapié en la presentación del valor razonable de los recursos (obligaciones...

This timely book is a rare, cogent analysis of the regulation of insurance companies from the point of view of economics. The topic of insurance regulation has come right to the fore in the policy debates in financial regulation, and rightly so given the pivotal role of insurance companies in the financial system as direct and indirect claimholders of banks and other leveraged institutions, as well as their long-term role in channeling savings for an aging population. And yet, the current framework for insurance regulation across the advanced economies is a patchwork of rules that have built up over years, based loosely on actuarial considerations, and which differ substantially from one jurisdiction to another without much rationale. This book sets the standard for debate in this important area. The book surveys the recent episodes of failures of insurance companies, reviews the actuarial basis for insurance regulation and its weaknesses, and proposes an economic rationale for insurance regulation based on capital as a way of mitigating moral hazard. The scholarship backing the book is impeccable, as would be expected from authors of such caliber, but the book has added authority arising from the fact that one of the authors (Plantin) also has first-hand experience as an insurance regulator. The book will be of wide interest to financial economists, and will be essential reading for policy makers in central banks and financial regulatory bodies. In time, this book will gain the status of (and be seen as a natural accompaniment to) Dewatripont and Tirole's classic on the prudential regulation of banks, and will be widely read and cited.

Some firms voluntarily make disclosures about the controls and processes in place to ensure the reliability of fair value estimates. Consistent with these disclosures being driven by investors' concerns about the reliability of their SFAS 157 estimates, we find that firms with more opaque estimates are more likely to provide such disclosures. We then examine whether these disclosures improve investors' perception about the reliability of fair value estimates. We find that they are associated with higher market pricing and lower information risk for Level 3 estimates. Further analyses of the disclosures reveal that the following types of information are particularly important to investors: discussion of the external and independent pricing of fair value estimates and their proper classification according to the SFAS 157 hierarchy. Overall, our results suggest that the voluntary reliability disclosures that firms provide beyond SFAS 157's three-level estimates help reduce investors' uncertainty toward the more opaque fair value estimates.

This study examines the economic implications of fair value liability gains and losses arising from the adoption of Statement of Financial Accounting Standards No. 159 (hereafter, FAS 159). Consistent with the notion that gains and losses contain value-relevant information, we find a positive correspondence between a firm's FAS 159 fair value liability gains and losses and current period stock returns. However, further analysis indicates that fair value gains and losses from liabilities have a negative association with future returns, suggesting that investors misprice this earnings component. This negative association is stronger for firms with low levels of institutional ownership. While the value-relevance tests provide some evidence that fair value changes from liabilities have information content, the negative association with future stock returns suggests that these gains are eventually not realizable or that the market has overreacted to the initial recognition of these gains. Overall, our study contributes evidence regarding the controversy over the recognition of fair value liability gains and losses by providing direct empirical evidence that such gains and losses are priced by the stock market but subsequently reversed within the next 12 months.

We provide survey evidence of chartered accountants' perspectives on the proposed conceptual framework of the International Accounting Standards Board. Our survey obtains their views on the changes in the definitions of assets and liabilities, recognition criterion, and additional guidance in these areas, as well as issues relating to other comprehensive income, business model-based accounting, and choice of measurement basis. Our field evidence suggests broad consensus with respect to most of these changes. The areas that generate the most disagreement among our respondents relate to the removal of economic benefits in the proposed asset definition, the proposal to remove the minimum probability threshold from the asset recognition criterion, and the use of fair value as a measurement basis for certain difficult to measure assets. Overall, our results provide interesting insights regarding how chartered accountants view the proposed conceptual framework.

This study examines the economic implications of fair value liability gains and losses arising from the adoption of Statement of Financial Accounting Standards No. 159 (hereafter FAS 159). We find a positive correspondence between a firm's FAS 159 fair value liability gains and losses and stock returns. Further analysis indicates that fair value gains and losses from liabilities attributable to the change in a firm's own credit risk, which are considered counter-intuitive by critics of fair value accounting for liabilities, are also positively related to returns. We also document that the volatility of earnings that incorporate FAS 159 liability fair value gains and losses is positively associated with market measures of firm risk. Our study contributes to the controversy over recognition of liability fair value gains and losses by providing direct empirical evidence that such gains and losses are value and risk relevant.

Some firms voluntarily make disclosures about the controls and processes in place to ensure the reliability of fair value estimates. Consistent with these disclosures being driven by investors' concerns about the reliability of their SFAS 157 estimates, we find that firms with more opaque estimates are more likely to provide such disclosures. We then examine whether these disclosures improve investors' perception about the reliability of fair value estimates. We find that they are associated with higher market pricing and lower information risk for Level 3 estimates. Further analyses of the reliability disclosures reveal that the following types of information are particularly important to investors: discussion of the external and independent pricing of fair value estimates as well as the estimates' proper classification according to the SFAS 157 hierarchy. Overall, our results suggest that the voluntary reliability disclosures that firms provide beyond SFAS 157's three-level estimates help reduce investors' uncertainty toward the more opaque fair value estimates.

Prior research suggests there are significant differences in how investors perceive the reliability of fair values. An unaddressed question in this stream of research is whether crosscountry differences in institutional factors can mediate differences in reliability for the fair value hierarchy measurements. We contribute to the research on fair value accounting by examining the impact of institutional factors toward the perceived reliability of fair value measurements in an international context. Based on an international sample of banks across twenty different countries, we find that the probability of crash risk is lower among countries with better financial development infrastructure, greater level of trust, tighter security regulations and higher level of disclosure requirements. These results apply to Level 1 assets but not to Level 2 and Level 3 assets. We also document that these crosscountry factors improve the trading volume of our sample banks. Our study provides early evidence suggesting that fair value measurements across the fair value hierarchy are impacted by a country's institutional background and financial development as well as the extent of its securities regulation and disclosure level. Our study suggests that there are ongoing concerns toward opaque fair values which are not fully eliminated by institutional differences. In addition, these differences matter in influencing investor willingness to trade in these stocks.

Loose Lips … I was very surprised that James C. Hickman in his article, "Actuarial Ideas That Helped Win World War II" (May/ June 2000) did not mention the work of actuaries attached to the operational research group called the Tenth Fleet, which made many important contributions to winning the Battle of the Atlantic.

Alhamdulilah Rabbil'alamin, kami panjatkan puji syukur kepada Allah SWT. Tuhan semesta alam yang telah melimpahkan karunia nya kepada kita semua, sehingga dengan berkat dan karunia nya kami dapat menyelesaikan makalah ini tepat pada waktunya. Dan tak lupa kami ucapkan terima kasih yang sebesar besarnya kepada bapak Wirmie Eka Putra, S.E.,M.Si. Yang telah memberi kami tugas untuk membuat makalah ini. Makalah ini berisikan tentang Penyusunan Anggaran Konvensional. Kami menyadari sepenuhnya banyak kekurangan dan keterbatasan, meskipun telah di sertai dengan usaha yang maksimal sesuai dengan kemampuan yang telah kami miliki. Oleh karna itu, segala saran dan kritik yang membangun sangat di harapkan untuk perbaikan makalah yang akan datang. Dengan ini kami berharap semoga makalah ini bermanfaat bagi semua pihak.

The international Joint Working Group of Standard Setters (JWG) was established by the IASC (replaced by the IASB in 2001) and other national accounting standard setters for the purpose of developing a comprehensive set of principles for reporting financial instrument at fair value. In December 2000 the JWG issued a Draft Standard addressing the accounting for financial instruments and similar items. The proposals in the Draft Standard would affect existing accounting practice in many areas, including those related to the use of hedge accounting. This article states the main problems that could result from applying the provisions of that Draft Standard, offering some alternative approaches to overcome those problems.

This chapter concludes the book on financial evolution and regulatory regimes in Sweden. It summarizes the lessons learned from the Swedish experiences from banking development and banking regulations, and ends with discussing the question whether a new macroeconomic regime is being initiated. Keywords Financial crises • Macroeconomic regimes • Regulations Basel regulations • Social democracy This book provides an overview of the Swedish experience of financial regulation and development from around 1900 to 2015. It places special emphasis on the interaction between national and international phenomena and on how financial regulations are usually connected to larger shifts in general macroeconomic policy. This chapter distills a number of key points from the Swedish experience.

As with many IFRS adopters, China's new accounting standards contain modifications to IFRS designed to reflect its unique environment (as discussed in detail later). However, for ease of exposition, we follow prior literature (e.g., He et al., 2012) and refer to the adoption of these new standards simply as IFRS adoption. 2 Our sample includes Hong Kong, which is a special administrative region of China. 3 The term ''foreign investors" and QFIIs are used interchangeably throughout the text.

The circumstances which led to the development of each of these methods of accounting will be examined to better understand the context in which each technique was to be incorporated and its effect. Analysis will be performed on whether the use of these accounting practices changed since their inception and if so, for what purpose. The researcher will discuss how and if these accounting procedures become instrumental in relation to the valuation of housing assets, particularly in America. As a result of the financial crisis, some experts have expressed the opinion that Fair Value Accounting as opposed to the historical cost approach exacerbated the housing crisis while others have developed opinions that Fair Value Accounting had no negative affect on the crisis and in fact allowed for greater transparency in disclosure. The finding will analyze the effect of Fair Value Accounting on the housing crisis and whether the historical cost valuation method would be more effective and less...

In light of the upcoming Solvency II Pillar 3 disclosure regulation for the insurance industry, this paper explores the risk disclosure practices in annual reports of European primary insurers in the Dow Jones Stoxx 600 Insurance Index between 2005 and 2009. On the basis of a self-constructed risk disclosure index, the study examines the relation between the extent of risk disclosure and insurance companies' characteristics such as size, risk, profitability, ownership dispersion, cross-listing, home country and type of insurance sold, to draw inferences regarding motives for enhanced risk disclosure based on positive accounting theory.