After the Stock Options Boom: Changes in Equity-Based Pay Following the Mandatory Adoption of IFRS 2

2021 ◽  
pp. 2150006
Author(s):  
Robert M. Gillenkirch ◽  
Olaf Korn ◽  
Alexander Merz
Keyword(s):  
Financial Reporting ◽  
Stock Options ◽  
The United States ◽  
Stock Option ◽  
Rent Extraction ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Design Elements ◽  
Mandatory Adoption ◽  
Ifrs 2

This paper investigates the economic consequences of the mandatory adoption of International Financial Reporting Standard 2 (hereafter, “IFRS 2”) on firms’ choices between alternative executive compensation instruments. With a unique, hand-collected dataset that contains design elements of stock option plans, we find that the adoption of IFRS 2 affects both the decision to keep or to give up stock options and the choice of alternative equity compensation instruments. In contrast to recent evidence from the United States, we find that the majority of firms replacing stock options by other equity instruments switched to performance shares, not to restricted stock. Our dataset allows us to relate firms’ reactions to IFRS 2 to the three major rationales explaining stock option compensation practice, namely, optimal contracting, managerial rent extraction, and perceived cost. Our results suggest that all three rationales contribute to explaining changes in compensation design because firms with sophisticated option plans tend to keep their options, whereas design decisions by firms abandoning options are related to a lack of shareholder power.

scholarly journals Tratamiento contable de las stock options según la normativa contable internacional

2010 ◽  
Author(s):  
ELENA MERINO MADRID ◽  
REGINO BANEGAS OCHOVO ◽  
JESÚS FERNANDO SANTOS PEÑALVER
Keyword(s):  
Financial Reporting ◽  
Stock Options ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Accounting ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Ifrs 2

LA RETRIBUCIÓN QUE HACEN LAS EMPRESAS A SUS DIRECTIVOS Y EMPLEADOS MEDIANTE LA ENTREGA DE OPCIONES SOBRE ACCIONES (STOCK OPTIONS) SE HA CONVERTIDO EN UNA PRÁCTICA HABITUAL EN MUCHOS PAÍSES DEL MUNDO. HASTA FECHAS RECIENTES NO EXISTÍA UN CONSENSO SOBRE EL TRATAMIENTO CONTABLE QUE SE DEBÍA DAR A ESTE TIPO DE TRANSACCIONES; SIN EMBARGO, EN LA ACTUALIDAD PARECE QUE TAL CONSENSO SE HA ALCANZADO AL EXIGIR TANTO EL INTERNATIONAL ACCOUNTING STANDARDS BOARD (IASB) COMO EL FINANCIAL ACCOUNTING STANDARDS BOARD (FASB), EN LA INTERNATIONAL FINANCIAL REPORTING STANDARD, IFRS 2 (NIIF 2, NORMA INTERNACIONAL DE INFORMACIÓN FINANCIERA) Y STATEMENT OF FINANCIAL ACCOUNTING STANDARDS (SFAS) 123 (R) RESPECTIVAMENTE, QUE SE RECONOZCA LA REMUNERACIÓN BASADA EN LA ENTREGA DE OPCIONES SOBRE ACCIONES COMO UN GASTO EN LOS ESTADOS FINANCIEROS. EL OBJETIVO DE ESTE TRABAJO ES ANALIZAR EL TRATAMIENTO CONTABLE APLICABLE DE ACUERDO CON LA NORMATIVA CONTABLE INTERNACIONAL O DE INFORMACIÓN FINANCIERA (NIC/NIIF).

scholarly journals Adoption of International Financial Reporting Standard in Nigerian: The Good, the Bad and the Ugly

2017 ◽  
Vol 1 (1) ◽  
pp. 42-61
Author(s):  
Shafi'u Abubakar Kurfi
Keyword(s):  
Financial Reporting ◽  
International Standards ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Time Period ◽  
Tax Laws ◽  
Mandatory Adoption ◽  
Nigerian Government ◽  
Enforcement Mechanisms ◽  
Financial Consultants

This paper examines the mandatory adoption of IFRS in Nigeria that started since January, 2012; and how far the Nigerian government via the Financial Reporting Council has gone in the transition of Nigerian local GAAP (SAS) to International GAAP (IFRS).The study examined and identified the benefits that Nigeria and Nigerians gained so far as a result of convergence into IFRS; the bottlenecks that paralyze the full percentage of the transition as well examined the techniques taken by Nigeria in making sure a smooth, successful and amicable implementation of the three stages of convergence.In the course of this study the study observed vividly that Nigeria has gained a lot from the convergence because most of its local financial expertise are now turned into International expertise as well as International financial consultants, thus, convergence has increase the level of employment in the country.The main drawbacks of the transition is amendments of Nigerian tax laws, because tax laws are among the most complicated laws in accounting arena; weak compliance and enforcement mechanisms by Financial Reporting Council. As a manner of recommendation, for Nigerian government to gain more from dividend of convergence there is need to increase the time period for the on-going transition because implementation of certain requirements of International Standards like IFRS successfully should be in a gradual and careful process not just three years, because convergence to IFRS is not just an Accounting and Taxation exercises but a total and complete transition that requires every stakeholders concerned to learn a new technical language as well as new modes of working with a new standard.

scholarly journals Adapting the Default Weighted Survival Analysis Modelling Approach to Model IFRS 9 LGD

Risks ◽  
2021 ◽  
Vol 9 (6) ◽  
pp. 103
Author(s):  
Morne Joubert ◽  
Tanja Verster ◽  
Helgard Raubenheimer ◽  
Willem D. Schutte
Keyword(s):  
Survival Analysis ◽  
Financial Reporting ◽  
Proportional Hazards ◽  
Proportional Hazards Model ◽  
Survival Curve ◽  
Cox Proportional Hazards ◽  
Cox Proportional Hazards Model ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Ifrs 9

Survival analysis is one of the techniques that could be used to predict loss given default (LGD) for regulatory capital (Basel) purposes. When using survival analysis to model LGD, a proposed methodology is the default weighted survival analysis (DWSA) method. This paper is aimed at adapting the DWSA method (used to model Basel LGD) to estimate the LGD for International Financial Reporting Standard (IFRS) 9 impairment requirements. The DWSA methodology allows for over recoveries, default weighting and negative cashflows. For IFRS 9, this methodology should be adapted, as the estimated LGD is a function of in the expected credit losses (ECL). Our proposed IFRS 9 LGD methodology makes use of survival analysis to estimate the LGD. The Cox proportional hazards model allows for a baseline survival curve to be adjusted to produce survival curves for different segments of the portfolio. The forward-looking LGD values are adjusted for different macro-economic scenarios and the ECL is calculated for each scenario. These ECL values are probability weighted to produce a final ECL estimate. We illustrate our proposed IFRS 9 LGD methodology and ECL estimation on a dataset from a retail portfolio of a South African bank.

scholarly journals Lobbying na Regulação Contábil: Evidências do Setor Petrolífero

2014 ◽  
Vol 25 (65) ◽  
pp. 124-144 ◽  
Author(s):  
Odilanei Morais dos Santos ◽  
Ariovaldo dos Santos
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Status Quo ◽  
International Accounting ◽  
International Accounting Standards ◽  
Discussion Paper ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
International Accounting Standards Board

Este trabalho tem como objetivo identificar os fatores determinantes à submissão de cartas comentários, como estratégia de lobbying no contexto da regulação contábil, à audiência pública do Discussion Paper Extractive Activities do International Accounting Standards Board IASB).Os resultados mostram o tamanho como fator determinante, em todas as modelagens utilizadas, indicando que grandes empresas petrolíferas possuem maior probabilidade para realizar lobbying. Essa propensão é verificada para posicionamentos essencialmente desfavoráveis às propostas apresentadas pelo IASB, o que implica em considerar que a revisão/substituição do International Financial Reporting Standard -IFRS6 será um processo complexo e sujeito a pressões por parte das empresas petrolíferas para manter o status quo.

Accounting Standards and Earnings Quality — Evidence from Registered ADRs

2018 ◽  
Vol 21 (04) ◽  
pp. 1850022
Author(s):  
Yaseen S. Alhaj-Yaseen ◽  
Kean Wu ◽  
Leslie B. Fletcher
Keyword(s):  
Financial Reporting ◽  
Earnings Quality ◽  
Accounting Standards ◽  
Securities And Exchange Commission ◽  
High Quality ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
The Us ◽  
Us Gaap

This paper examines the changes in earnings quality of registered American Depositary Receipts (ADRs) as a result of switching accounting standards. We aim to shed light on the potential impact of International Financial Reporting Standard (IFRS) adoption on US firms. A suboptimal approach to achieve this goal is through examination of US firms’ surrogates such as ADRs. Unlike previous studies, we made a distinction between registered and unregistered ADRs and affirmed that registered ADRs are the closest surrogates with which to conduct our analysis because they are exclusively required to adhere to the Securities and Exchange Commission (SEC)’s stringent disclosure requirements. When cross-listing their equity on the US exchanges, foreign issuers can file their financial reports with the SEC using IFRS, US GAAP (generally accepted accounting principles), or their domestic GAAP with reconciliation to US GAAP. An improvement in earnings quality is documented when ADRs adopt US GAAP or IFRS versus domestic GAAP. However, when the comparison is made between US GAAP and IFRS, no difference in earnings quality is documented. These results indicate that switching to high-quality accounting standards is likely to improve earnings quality. This improvement is maximized when the difference between reporting standards is high and minimized if otherwise. Our conclusion is that the adoption of IFRS in the US is unlikely to change earnings quality of local issuers. Moreover, we drew a distinction between reconciliation with and adoption of high-quality accountings standards and find that while the former can enhance earnings quality, the latter can further improve it.

scholarly journals IFRS based Zakat Reporting: Adoption Rational WesternMethod into Institutional Accountability

IKONOMIKA ◽  
2018 ◽  
Vol 3 (1) ◽  
pp. 17 ◽  
Author(s):  
Mohammad Bintang Pamuncak ◽  
Bayu Taufiq Possumah ◽  
Zairihan Abdul Hamid3
Keyword(s):  
Financial Reporting ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Financial Report ◽  
Institutional Accountability ◽  
Preliminary Study

This study aims to evaluate the characteristics of zakat institution and proposes the adoption of International Financial Reporting Standard (IFRS) since it has developed and provides various product i.e zakat for productive purpose. This is important, considering that one of the measurement of accountability and transparency of an institution is providing brief financial report towards its beneficaries. Thereby, this study found that practically zakat institution is simillar to the SMEs, and there are 11 strandard of IFRS for SMEs that could be applicable to zakat institutionto achieve accountability and transparency. However, this study is preliminary study that proposes a conceptual frameworkwhich limited to the sharia compliance of IFRS that could be applicable to zakat Institution.Keywords: IFRS for SMEs, SMEs Criteria, Zakat InstitutionJEL Classification:

scholarly journals Internal model for IFRS 9 - Expected credit losses calculation

2018 ◽  
Vol 69 (3) ◽  
pp. 269-297 ◽  
Author(s):  
Hrvoje Volarević ◽  
Mario Varović
Keyword(s):  
Financial Reporting ◽  
Internal Model ◽  
Balance Sheet ◽  
Analytic Hierarchy ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
External Data ◽  
Simple Implementation ◽  
Ifrs 9 ◽  
Credit Losses

This article explores and analyzes the implementation problem of International Financial Reporting Standard 9 (IFRS 9) which is in use from 1 January 2018. IFRS 9 is most relevant for financial institutions, but also for all business subjects with a significant share of financial assets in their Balance sheet. The main objective of this article is the implementation of new impairment model for financial instruments, which is measurable through Expected Credit Losses (ECL). The use of this model is in correlation with a credit risk of the company for which it is necessary to determine basic variables of the model: Exposure at Default (EAD), Loss Given Default (LGD) and Probability of Default (PD). Basel legislation could be used for LGD calculation while PD calculation is based on specific methodology with two different solutions. In the first option, PD is taken as an external data from reliable rating agencies. When there is no external rating, an internal model for PD calculation has to be created. In order to develop an internal model, authors of this article propose application of multi-criteria decision-making model based on Analytic Hierarchy Process (AHP) method. Input data in the model are based on information from financial statements while MS Excel is used for calculation of such multi-criteria problem. Results of internal model are mathematically related with PD values for each analyzed company. Simple implementation of this internal model is an advantage compared to other much more complicated models.

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