Is fair value information relevant to investment decision-making: Evidence from the Australian agricultural sector?

Despite major accounting standards boards worldwide continuing to use fair value extensively, academic evidence on the relevance of fair value accounting has focused on financial assets. This study breaks new ground to provide the first empirical evidence for the agricultural sector on the relevance of fair value accounting. It examines the forecasting power of the fair value of biological assets for future operating cash flows. Using all agribusinesses listed in Australia, where fair value accounting was first implemented in the agricultural sector, we find that fair value of biological assets does not provide incremental forecasting power for future operating cash flows, whether market-determined prices or managerially estimated value is used. The findings of this study provide empirical support for the call by Elad and Herbohn in 2011 for the International Accounting Standards Board (IASB) to revisit the implementation of fair value accounting in the agricultural sector. JEL Classification: G14, G38, M41, Q18

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Fair value and its impact on the behaviour of the investment decision maker: القيمة العادلة وأثرها على سلوك صانع القرار الاستثماري

المجلة العربية للعلوم ونشر الأبحاث مجلة العلوم الاقتصادية والإدارية والقانونية ◽

10.26389/ajsrp.l110121 ◽

2021 ◽

Vol 5 (16) ◽

pp. 153-172

Author(s):

Iman Shihan Abbas Al-Mashhadani, Ali Abdulhassan Abbas Al-Fa Iman Shihan Abbas Al-Mashhadani, Ali Abdulhassan Abbas Al-Fa

Keyword(s):

Decision Making ◽

Investment Decision ◽

Fair Value ◽

Two Dimensions ◽

Fair Value Accounting ◽

Future Expectations ◽

Positive Effects ◽

Investment Decision Making ◽

Training Courses ◽

The Impact

The study is intended to investigate the impact of applying fair value, as represented in two dimensions: the relevance of fair value accounting, and the obstacles confronting fair value accounting on investment decision making, for which the hypotheses of the study has been confirmed. The problem focusses on the impact of ambiguous standards, accounting disclosures, and the lack of credibility and reliability of investment decision making. The study is also intended to determine the positive effects of applying the fair value in terms of achieving quality in profits and enabling investment decision making to take correct decisions. The study attempts to investigate the role of fair value in determining the actual value of the entity depending on the market value of bank assets so as to improve future expectations and compare with other banks that depend on fair value. A questionnaire has been distributed to a sample of 70 individuals working at commercial banks in Karbala, Iraq. of accounts and auditors and investment decision-makers. we used multiple regression and the backward method in our statistical analysis. The study asserts the necessity to have legislation related to fair value and that consolidates the concepts of fair value and the ways in which this can be measured in banks through additional training courses.

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Valuation Implications of FAS 159 Reported Gains and Losses From Fair Value Accounting for Liabilities

Journal of Accounting Auditing & Finance ◽

10.1177/0148558x211017837 ◽

2021 ◽

pp. 0148558X2110178

Author(s):

Sung Gon Chung ◽

Cheol Lee ◽

Gerald J. Lobo ◽

Kevin Ow Yong

Keyword(s):

Stock Returns ◽

Accounting Standards ◽

Institutional Ownership ◽

Fair Value ◽

Negative Association ◽

Financial Accounting ◽

Fair Value Accounting ◽

Economic Implications ◽

Current Period ◽

Gains And Losses

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 current period stock returns, consistent with the notion that these gains and losses are priced by equity investors. However, further analysis indicates that fair value gains and losses from liabilities have a statistically significant negative association with future returns, suggesting that investors misprice this earnings component and subsequently correct the mispricing. We also find that the negative association for fair value gains is stronger for firms with lower levels of institutional ownership.

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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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PENGARUH OPERATING CAPACITY, SALES GROWTH DAN ARUS KAS OPERASI TERHADAP FINANCIAL DISTRESS

Jurnal Riset Keuangan Dan Akuntansi ◽

10.25134/jrka.v5i1.1883 ◽

2019 ◽

Vol 5 (1) ◽

Author(s):

Annisa Livia Ramadhani ◽

Khairun Nisa

Keyword(s):

Logistic Regression ◽

Regression Analysis ◽

Financial Distress ◽

Agricultural Sector ◽

Stock Exchange ◽

Sampling Technique ◽

Cash Flows ◽

Sales Growth ◽

Operating Capacity ◽

Operating Cash Flows

This study aims to determine how the influence of operating capacity, sales growth and operating cash flows on financial distress. The population in this study israll agricultural sector companies listed on the Indonesia Stock Exchange (IDX) in 2013-2017. The sampling technique in this study used purposive sampling which produced 8 samples in a period of 5 years, namely as many as 40 units of data samples. The analytical method used is logistic �regression analysis which is processed. using SPSS Version 25. Based on the results of this study, it was found that simultaneous operating capacity, sales growth and operating cash flows influence the occurrence of financial distress. Then partially, operating capacity and sales growth have no effect on the occurrence of financial distress, while operating cash flows have a positive and significant effect on the occurrence of financial distress.�Keyword : Financial Distress, Operating capacity, Sales growth, Operation cash flow.

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MENGUPAS PERSOALAN STANDAR AKUNTANSI KEUANGAN - GOODWIL DI BERBAGAI NEGARA : SUATU PENDEKATAN STUDI LITERATUR

Jurnal Riset Akuntansi Dan Bisnis Airlangga ◽

10.31093/jraba.v2i2.48 ◽

2017 ◽

Vol 2 (2) ◽

Author(s):

Deddy Kurniawansyah

Keyword(s):

Research Method ◽

Intangible Assets ◽

Accounting Standards ◽

Financial Statements ◽

Fair Value ◽

Financial Accounting ◽

International Accounting Standards ◽

Fair Value Accounting ◽

Literature Study ◽

Accounting Standard

This literature study explains and describe the development of the concept of goodwill from the perspective of accounting by observing and describing until the development at this time, discusses differences in accounting standards of goodwill applicable in some countries, and explains the things that contradict the goodwill. This research method used qualitative with literature study. The results of this study are in some countries, the concepts and rules on goodwill accounting have undergone various changes, including international accounting standards issued by the IASC. Initially goodwill is capitalized and amortized over no more than 20 years. But, along with the increasing use of fair value accounting in accounting standards, thetreatment for goodwill also experienced a shift that is eliminated by the amortization method is replaced by doing impairment test to goodwill. The results of this study contribute as add to the treasury of financial accounting literature, especially accounting treatment of goodwill as intangible assets in the financial statements of various countries such as Indonesia, America and the England.Keyword :Goodwiil, Impairment, Financial Accounting Standard

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The localised accounting environment in the implementation of fair value accounting in Indonesia

Qualitative Research in Accounting & Management ◽

10.1108/qram-08-2020-0126 ◽

2022 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Bernadia Linggar Yekti Nugraheni ◽

Lorne Stewart Cummings ◽

Alan Kilgore

Keyword(s):

Emerging Economies ◽

Accounting Standards ◽

Fair Value ◽

Successful Implementation ◽

Fair Value Accounting ◽

Structured Interviews ◽

Content Type ◽

Emerging Country ◽

Government Involvement

Purpose This case study aims to investigate the role of actors in the implementation of fair value standards in an emerging country, Indonesia. Design/methodology/approach This study uses semi-structured interviews with important actors within the local accounting profession, standard setting and regulatory environment, to analyse fair value accounting implementation. This study also incorporates information from press releases and newspapers, to provide a more comprehensive picture of fair value implementation. Findings First, professionals undertake routine actions, cultivate interests and strategically navigate their environment during the process of fair value standard implementation. Second, the role of appraisers becomes more prominent during this process. Third, government involvement is significant in ensuring the successful implementation of global accounting standards. Research limitations/implications First, differing localised contexts, including communities and actors, may shape how an emerging country undertakes the diffusion and implementation of global standards, which in turn can also lead to institutional change. Second, government involvement is crucial in supporting the implementation of global accounting standards within emerging economies. Third, implementing market-based measurements within emerging economies characterised by a lack of an active and liquid market may present challenges. Practical implications Third, implementing market-based measurements within emerging economies characterised by a lack of an active and liquid market may present challenges. Originality/value This study applies the concept of Institutional Work within Institutional Theory to explain how fair value standards are implemented within a localised emerging economy characterised by unique actor roles and goal-directed action.

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Fair Value Accounting and Corporate Reporting in Nigeria: A Logistics Regression Approach

International Journal of Financial Research ◽

10.5430/ijfr.v11n2p301 ◽

2020 ◽

Vol 11 (2) ◽

pp. 301

Author(s):

A. E. Adegboyegun ◽

E. Ben-Caleb ◽

A. O. Ademola ◽

J. U. Madugba ◽

D. F. Eluyela

Keyword(s):

Strong Relationship ◽

Fair Value ◽

Cash Flows ◽

Primary Data ◽

Fair Value Accounting ◽

Corporate Reporting ◽

Regression Approach ◽

The Impact ◽

Future Cash Flows ◽

Structured Questionnaire

This study examined the impact of fair value accounting on corporate reporting in Nigeria. The primary data used were gathered through a well-structured questionnaire, designed and administered to 120 respondents, who are made up of accountants, auditors, bankers, financial experts and practitioners in Lagos State, Nigeria. We adopted the logistic regression approach in analyzing the research questions. We found that fair value accounting has impact on corporate reporting. The Cox and Snell’s R-Square revealed that 67.1% of the variation in the corporate reporting was explained by the logistic model. We further found a moderate strong relationship between the fair value accounting and corporate reporting. Based on this finding, the study concluded that the used of fair value helped in predicting the earnings and assessment of the amounts, timing and uncertainty of future cash flows in corporate reporting which dependent on its reliability. However, institutional factors played an essential role in enhancing the reliability of discretionary fair value estimates which in return increased the informativeness of accounting information in corporate reporting.

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On theoretical engorgement and the myth of fair value accounting in China: a reply

Accounting Auditing & Accountability Journal ◽

10.1108/aaaj-09-2019-4165 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Kathryn Bewley ◽

Cameron Graham ◽

Songlan Peng

Keyword(s):

Accounting Standards ◽

Movement Analysis ◽

Fair Value ◽

Research Approach ◽

Fair Value Accounting ◽

Political Factors ◽

Content Type ◽

Accounting Research

PurposeThis article is a reply to “On theoretical engorgement and the myth of fair value accounting in China” Nobes (2019) from the authors of “Adaptability to fair value accounting in an emerging economy: A case study of China's IRFS convergence” (Peng and Bewley, 2010) and “The Winding Road to Fair Value Accounting in China: A Social Movement Analysis” (Bewley et al., 2018).Design/methodology/approachThis article engages directly with the arguments of the criticism.FindingsThis article argues that the author of the commentary misunderstands the purpose, content and findings of both papers. By providing only a narrowly focused technical analysis of the new Chinese accounting standards, the author fails to see that their qualitative research approach reveals important, complex social and political factors at play in China's attempts to adopt modern international accounting principles. The commentary expresses a view that accounting is a neutral technology that needs only to be clearly defined and enumerated to be correctly implemented, whereas this research takes a much broader and deeper perspective. The authors seek to understand how China was able to successfully adopt fair value accounting standards in 2006, whereas an earlier attempt to introduce fair value in 1998 had led to abuse of fair value measurements and the eventual repeal of fair value regulations in 2001.Practical implicationsThis article helps clarify the purpose of qualitative accounting research, the role of theory in such research and the usefulness of theory in describing and explaining empirical case facts related to changes in accounting standards, particularly in an international context.Originality/valueThis article contributes to a better appreciation of qualitative accounting research.

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