Transparency of Fair Value Accounting and Tax

The Oxford Handbook of Economic and Institutional Transparency ◽

10.1093/oxfordhb/9780199917693.013.0023 ◽

2014 ◽

pp. 476-494

Author(s):

Eva Eberhartinger ◽

Soojin Lee

Keyword(s):

Earnings Management ◽

Financial Reporting ◽

Accounting Standards ◽

Fair Value ◽

Reporting Standards ◽

Fair Value Accounting ◽

Financial Reporting Standards ◽

Comprehensive Income ◽

Accounting Measurement ◽

Other Comprehensive Income

This chapter examines transparency in fair value accounting (measurement, presentation, additional disclosure), with special emphasis on tax disclosure and on the presentation of fair values in the statement of other comprehensive income. After considering the international relevance of the International Financial Reporting Standards, the chapter discusses fair value accounting in the context of accounting standards. It then reviews prior research to determine whether fair value accounting adds to accounting transparency. It also looks at the measurement and presentation of the transparency of fair value accounting based on relevance and reliability, along with issues of earnings management and procyclical effects.

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Accounting Concepts in Company Law

European Company and Financial Law Review ◽

10.1515/ecfr-2021-0019 ◽

2021 ◽

Vol 18 (3) ◽

pp. 398-427

Author(s):

Jesper Seehausen

Keyword(s):

Financial Reporting ◽

Accounting Standards ◽

Fair Value ◽

Company Law ◽

International Accounting Standards ◽

Reporting Standards ◽

Financial Reporting Standards ◽

Eu Legislation ◽

Starting Point ◽

Pros And Cons

Abstract Taking as a starting point Peter Hommelhoff’s argumentation that accounting law is, in many respects, linked to company law, the purpose of this article is to discuss one perspective of the links between accounting law and company law: accounting concepts in company law. After a brief outline of the existing EU legislation on accounting and a discussion on whether accounting law is part of company law, some examples of accounting concepts in company law – i. e. examples of accounting concepts that have been ‘implemented’ in company law – are discussed, drawing on the Consolidated Company Law Directive (CCLD) and the Shareholder Rights Directive (SRD 2) as well as the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS). These examples are related party transactions, consideration other than in cash and fair value, serious loss of the subscribed capital as well as a few other examples. It is also discussed whether accounting concepts in company law are a ‘good’ or a ‘bad’ thing. Balancing the pros and cons, in the author’s opinion, it is mostly positive that accounting concepts are used in company law in areas where this makes sense – and hence, in the author’s opinion, accounting concepts in company law are mainly a ‘good’ thing.

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Fair Value Accounting: Implementation Challenges Facing Small and Medium-Sized Entities in the Agricultural Sector

International Journal of Accounting and Financial Reporting ◽

10.5296/ijafr.v8i4.13643 ◽

2018 ◽

Vol 8 (4) ◽

pp. 60

Author(s):

Joseph Kwasi Agyemang ◽

Owusu Acheampong ◽

Wiafe Nti Akenten

Keyword(s):

Financial Reporting ◽

Agricultural Sector ◽

Fair Value ◽

International Standards ◽

Reporting Standards ◽

Fair Value Accounting ◽

Implementation Challenges ◽

Financial Reporting Standards ◽

Regulatory Bodies ◽

Value Reporting

Nowadays, the relevance of fair value in financial reporting is gaining impetus and recent discussions are moving in the trend of full fair value reporting. Small and medium-sized entities are not ignored in this instance. The move to new reporting standards results in various challenges for different interest groups such as auditors, preparers and regulators. The main objective of the study was to establish the fair value implementation challenges facing SMEs in the agricultural sector with evidence from regulatory bodies in Ghana. The study established that there is lack of methodological relationship between existing local laws and IFRS and absence of involvement of regulatory bodies in financial reporting standards setting. In light of these challenges, the study recommends involvement of regulatory bodies in standard setting and consideration should also be given to local laws when setting international standards.

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Comprehensive Income Reporting and Earnings Management

AFEBI Accounting Review ◽

10.47312/aar.v1i01.23 ◽

2017 ◽

Vol 1 (01) ◽

pp. 12

Author(s):

Runita Arum Kanti

Keyword(s):

Earnings Management ◽

Financial Reporting ◽

Interaction Effect ◽

Design Methodology ◽

Discretionary Accruals ◽

Reporting Standards ◽

Negatively Associated ◽

Financial Reporting Standards ◽

Comprehensive Income ◽

Income Reporting

Purpose. This paper aims to identify the association between comprehensive income reporting and earnings management. More specifically, this study examines whether the implementation of comprehensive income reporting regulations, namely SFAS 130 and ASU 2011-05 is associated with a decrease in earnings management. Design/ methodology. Data for all variables is retrieved from Compustat Global for a nine-year sample of 7962 US firms reporting under International Financial Reporting Standards (IFRS) that provide all the necessary data to conduct the study. The Modified Jones Model is used as a proxy to measure earnings management. Comprehensive income figures are retrieved from Compustat. Recalculated (as-if) numbers are used for firm years prior to the implementation of SFAS 130. While as-reported amounts are used for the years where SFAS 130 has been implemented and also the years during the implementation of ASU 2011-05. Findings. Comprehensive income is found to be significantly negatively associated with earnings management through discretionary accruals. Furthermore, the interaction effects indicate that, after the implementation of SFAS 130 and ASU 2011-05, comprehensive income becomesmore negatively associated with discretionary accruals. Relevance. Other than contributing to the growing literature regarding the usefulness of comprehensive income reporting, this research has implications for the FASB in assessing whether they achieved the target of better comprehensive income reporting. Key words: Comprehensive Income, Earnings management, Interaction effect, Reporting Regulations, SFAS 130, ASU 2011-05.

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Continued Impact of International Financial Reporting Standards on U.S. Generally Accepted Accounting Principles

The Journal of Global Awareness ◽

10.24073/jga/1/01/07 ◽

2020 ◽

pp. 1-12

Author(s):

Sylwia Gornik-Tomaszewski ◽

Victoria Shoaf

Keyword(s):

Financial Reporting ◽

Accounting Standards ◽

Fair Value ◽

International Financial Reporting Standards ◽

Reporting Standards ◽

Generally Accepted Accounting Principles ◽

Financial Reporting Standards ◽

Accounting Principles ◽

Value Measurement ◽

The Impact

The milestone outcomes of over a decade of close cooperation between the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) on the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) have been highly publicized in the professional media. Great attention has been paid to such joint FASB and IASB projects as accounting for business combinations, fair value measurement, and revenue recognition. The impact of U.S. GAAP on IFRS has also been discussed and highlighted in many professional and academic resources. It should come as no surprise since FASB is considered a world leader in creating high-quality standards through an exemplary standard-setting process. In this paper, we look at the least noticed outcome of the convergence process: the impact of IFRS on U.S. GAAP. We reviewed all of the Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification®, from the first issued in June 2009 to 2016, and listed instances where U.S. GAAP was significantly modified to reflect international solutions. These examples of U.S. GAAP modifications indicate that the impact of IFRS on U.S. GAAP continued well after the bilateral cooperation between FASB and IASB effectively ended in 2014. Furthermore, look at the most recent FASB pronouncement let us conclude that the FASB continues to be engaged in seeking comparable global accounting solutions.

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Presentation Pattern and the Value Relevance of Comprehensive Income --- Evidence from China

International Journal of Economics and Finance ◽

10.5539/ijef.v9n6p31 ◽

2017 ◽

Vol 9 (6) ◽

pp. 31 ◽

Cited By ~ 1

Author(s):

Wenjing Xu ◽

Ming Qi

Keyword(s):

Financial Reporting ◽

Information Disclosure ◽

Value Relevance ◽

Accounting Standards ◽

Accounting Standard ◽

Financial Reporting Standards ◽

Comprehensive Income ◽

Other Comprehensive Income ◽

The Impact

In 2006 the Chinese Ministry of finance(CMF) issued new accounting standards that required companies began to present comprehensive income information in the statement of equity. In 2009 and 2014, CMF changed the comprehensive income presentation pattern consecutively twice, from the equity statement pattern to the performance statement transition pattern, and then to the single performance statement. The purpose of these changes is to harmonize China Accounting Standard (CAS) with International Financial Reporting Standards(IFRS). It also aims to enhance the usefulness of comprehensive income information by improving the transparency of information disclosure. From the perspective of presentation patterns, the paper examines the influence of presentation pattern changes on the value relevance of comprehensive income (CI), and on other comprehensive income (OCI). The results show that, under the equity statement pattern, neither CI nor OCI was correlated with value. Under the performance statement transition pattern, both CI and OCI have the value relevance. Under the single performance statement pattern, the CI has higher value relevance, while the OCI does not reflect higher value relevance. This study reveals the impact of comprehensive income presentation pattern on the usefulness of decision making. It has certain inspiration and reference for improving the quality of accounting standards and financial reporting.

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Konsep Nilai Wajar (Fair Value) dalam Standar Akuntansi Berbasis IFRS di Indonesia Apa dan Bagaimana?

Binus Business Review ◽

10.21512/bbr.v3i1.1286 ◽

2012 ◽

Vol 3 (1) ◽

pp. 93

Author(s):

Heri Sukendar W.

Keyword(s):

Financial Reporting ◽

Banking Industry ◽

Accounting Standards ◽

Fair Value ◽

Reporting Standards ◽

Accounting Standard ◽

Book Value ◽

Financial Reporting Standards ◽

The Difference ◽

International Accounting Standard

This paper is intended to explain the use of the concept of fair value instead of book value. The accounting world in Indonesia during the last few years have made convergency implementation of new accounting standards oriented to the International Financial Reporting Standards (IFRS) issued by International Accounting Standard Boars (IASB). This new accounting standard that emphasizes the concept of fair value compared with book value concept is outdated. The use of the concept of fair value of the difference and it turned out to be a trigger konvergency change the paradigm of the book value of a simpler, but less information is less transparent. The implementation of accounting standards konverjensi done gradually raises serious problems, this can be seen from postponed the application of PSAK 50 & PSAK 55 in the banking industry. Knowledge and experience of inadequate is a priority of fair value implementation difficulties.

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KONVERGENSI INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) DAN MANAJEMEN LABA DI INDONESIA

El Muhasaba Jurnal Akuntansi ◽

10.18860/em.v2i2.2365 ◽

2013 ◽

Vol 2 (2) ◽

Cited By ~ 2

Author(s):

Yona Octiani Lestari

Keyword(s):

Earnings Management ◽

Information Asymmetry ◽

Financial Reporting ◽

Accounting Standards ◽

Reporting Quality ◽

Financial Statements ◽

Fair Value ◽

Financial Reporting Quality ◽

New Paradigm ◽

Financial Reporting Standards

The existence of convergence of accounting standards to IFRS create a new paradigm in the accounting world. This requires the convergence of IFRS accounting standards that have been used to adopt new accounting standards with IFRS. The convergency accounting standards to IFRS increase a variety of influences, in accordance with IFRS characteristics such as : principle based, the use of fair value and more disclosure. Principle Based Standards require more judgment in its application, while the used of fair value items make the financial statements are presented with the actual values, more disclosure would reduce the level of information asymmetry. Convergence of IFRS is expected increasing financial reporting quality, such as, increased camparability and transparency of financial statements. Thus, with the convergence to IFRS expected reduce earnings management opportunities.

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ANALISA TINGKAT KEPATUHAN PENGUNGKAPAN WAJIB KONVERGENSI IFRS 2012 : STUDI KASUS PERUSAHAAN CONSUMER GOODS YANG TERDAFTAR DI BURSA EFEK INDONESIA 2011-2012

Jurnal Akuntansi Bisnis ◽

10.30813/jab.v7i1.772 ◽

2017 ◽

Vol 7 (1) ◽

Author(s):

Kurniawati Kurniawati

Keyword(s):

Financial Reporting ◽

Consumer Goods ◽

Stock Exchange ◽

Accounting Standards ◽

Fair Value ◽

International Financial Reporting Standards ◽

International Accounting Standards ◽

Reporting Standards ◽

Mandatory Disclosure ◽

Financial Reporting Standards

A recent trending issue in the world of accounting is the issue of the convergence of the 2012 International Financial Reporting Standards (IFRS). The process of this convergence has started since 2008 and is expected to be finished by 2011, so that it may be fully implemented in 2012. There are several main characteristics of IFRS, i.e. principal based, fair value, and disclosure.This research is conducted with the purpose of assessing the level of compliance with mandatory disclosure IFRS Convergence 2012 for consumer goods companies listed in the Indonesian Stock Exchange within the period of 2011-2012. The sample is selected using purposive sampling techniques and twenty seven (27) research samples are acquired in the consumer goods industry. To measure the level of compliance with mandatory disclosure, the Dichotomous method is used in this research by using items from the IFRS Presentation & Disclosure Checklist issued by Deloitte in 2012.The result of this research shows that the average level of compliance with mandatory disclosure IFRS Convergence 2012 for consumer goods companies is 75.95% which can be seen from four PSAK, i.e. PSAK 14, PSAK 16, PSAK 13 and PSAK 30.The highest level is from PSAK 16, followed by PSAK 14 in second, and PSAK 13 and PSAK 30 in third and fourth respectively. Keyword: International Financial Reporting Standards (IFRS) Convergence, Compliance, Mandatory disclosure level, International Accounting Standards, Consumer goods company

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How to Recognize and Measure Compound Financial Instruments?

Journal of Finance Research ◽

10.26549/jfr.v4i1.3582 ◽

2020 ◽

Vol 4 (1) ◽

pp. 85

Author(s):

Yan Wang ◽

Zhuqian He ◽

Shijia Yan

Keyword(s):

Financial Reporting ◽

International Financial Reporting Standards ◽

Reporting Standards ◽

Financial Instruments ◽

Financial Reporting Standards ◽

Comprehensive Income ◽

Other Comprehensive Income

Basing on the Xiaomi case, this paper discusses the most appropriate accounting treatment of compound financial instruments under the framework of International Financial Reporting Standards (IFRS) and how other comprehensive income (OCI) plays important role in it. Overall, this paper provides some references for policymaker to standardize financial instruments standard.

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Fair Value Accounting: Affect On The Auditing Profession

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v26i3.292 ◽

2010 ◽

Vol 26 (3) ◽

Cited By ~ 7

Author(s):

Danny Pannese ◽

Alan DelFavero

Keyword(s):

Multinational Corporations ◽

Financial Reporting ◽

Accounting Standards ◽

Fair Value ◽

Financial Accounting ◽

Credit Crisis ◽

Fair Value Accounting ◽

Financial Reporting Standards ◽

Business Entities ◽

Recent Financial Crisis

During this period of global markets, multinational corporations are demanding financial accounting standards with enhanced uniformity. In an effort to achieve this objective, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working together on the Convergence Project, aiming to develop accounting standards that closely correlate with international financial reporting standards.  In September 2006 and February 2007, the FASB issued two key fair value accounting (FVA) standards which focused on providing guidelines for fair value measurement (through a classification hierarchy), expanding disclosure requirements, and also allowing business entities to increase FVA’s application.  However, the recent financial crisis has placed increased scrutiny on estimates derived under FVA.  Consequently, a spotlight has been placed on the auditing profession, as the effectiveness of an auditor’s ability to test estimates derived under FVA has been questioned due to numerous firms approaching collapse in the midst of the credit crisis.  Thus, the purpose of this paper is to present the challenges auditors face when auditing FV estimates, and to discuss the profession’s capability of adapting to FVA in the future.

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