scholarly journals Combining Environmental and Spatial Discount Rates for Valuation of Assets According to International Financial Reporting Standards

2016 ◽  
Vol 13 (1) ◽  
pp. 14-20 ◽  
Author(s):  
Justine Sophia Jaunzeme
Keyword(s):  
Cash Flow ◽  
Discount Rate ◽  
Financial Reporting ◽  
Flow Model ◽  
Ecological Economics ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Discount Rates ◽  
Discounted Cash Flow ◽  
Financial Reporting Standards

Abstract Application of discount rate in finance and accounting is founded on the concept of time value of money. Discounted cash flow model is widely used for asset valuation under the International Financial Reporting Standards (in abbreviation, IFRS). The discount rate applied in valuation models normally is the best rate of return that investors would earn alternative investments. With emergence of ecological economics as a separate branch of economics, the concept of ecological (or in other words, environmental discount rate) has been elaborated. Muller (2013) in his paper ‘The Discounting Confusion: an Ecological Economics Perspective’, argues that traditional discounting can undermine long-term sustainability of the economy. In his work, Frank G. Muller considered adjusting the traditional discount rate in order to arrive at an environmental discount rate, which would help to ensure the sustainability of the economy. Hannon (2001) and Perrings (2001) in their paper ‘An Introduction to Spatial Discounting’ consider another variation of the discount rate - spatial discount rate. Spatial discount rate represents the rate at which the diffusion of environmental effects of economic activities is discounted over space. By February 2016, neither the application of environmental nor spatial discount rates under IFRS has been considered. The purpose of this paper is to analyse the implications that environmental and spatial discounting would have for the application of discounted cash flow model according to IFRS. The research methods applied are methods of economic analysis and synthesis.

scholarly journals Are Discount Rates In Disarray In The First Year Adoption Of International Financial Reporting Standards?

2021 ◽  
Vol 7 (04) ◽  
Author(s):  
Manh Dung Tran ◽  
Thu Thuy Nguyen
Keyword(s):  
Hong Kong ◽  
Discount Rate ◽  
Financial Reporting ◽  
First Year ◽  
Reporting Standards ◽  
Discount Rates ◽  
Discounted Cash Flow ◽  
Financial Reports ◽  
Financial Reporting Standards ◽  
Rate Selection

In calculating recoverable amount of cash generating units (CGUs) under the implementation of value in use approach, discount rate selection represents a central point in deciding the magnitude of impairment charges under Hong Kong Financial Reporting Standards (HKFRSs). The selection of discretion discount rate in the discounted cash flow model (DCF) could be used opportunistically to misstate impairment losses for the benefit of financial statement preparers and causes the transparency of the financial reports. This study is conducted to provide evidence of opportunistic behaviours relating on goodwill impairment by reporting statement preparers. By comparing independently estimated risk adjusted discount rates and those subjectively presented by large listed Hong Kong firms in the first year adoption of HKFRSs, the results showed that discount rates were presented in disarray, in which discount rates were more overstated than understated in comparison with scientifically generated ones.

scholarly journals IMPLIKASI MANAJEMEN LABA TERHADAP KONVERGENSI IFRS (INTERNATIONAL FINANCIAL REPORTING STANDARDS) DI INDONESIA

AKUNTABILITAS ◽  
2019 ◽  
Vol 11 (2) ◽  
pp. 87-98
Author(s):  
Media Kusumawardani
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Financial Reporting ◽  
Audit Quality ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Manufacturing Companies ◽  
Control Variables ◽  
Financial Reporting Standards ◽  
Operating Cash Flow

This paper addresses the question whether International Financial Reporting Standards (IFRS) is associated with lower earnings management.  The objective of this study is to examine the effect of IFRS convergence on the earnings management of Indonesian  firms by using audit quality as moderating variable. The research also includes several control variables (size, leverage, operating cash flow). The research objects were the manufacturing companies listed in Indonesia Stock Exchange from 2010-2013. The method of data collection is random sampling method and resulted 312 firms observation. Type of data are secondary data in the form of financial statement as the media manufacturing companies. The data were analyzed by using multiple regression analysis with Eviews8. In this research, the IFRS convergence is found not to have significant effect on earnings management and  the IFRS convergence with audit quality as moderating variable is found not to have significant effect on earnings management. The other result indicates that among the three control variables, size leverage and operating cash flow indicate the negative effect on earnings management. This research indicate that mandatory adopters of IFRS in Indonesia cannot be associated with lower earnings management.

International Financial Reporting Standards

2017 ◽  
Author(s):  
Гетьман ◽  
Viktor Gyetman ◽  
Рожнова ◽  
Olga Rozhnova ◽  
Сиднева ◽  
...  
Keyword(s):  
Cash Flow ◽  
Financial Reporting ◽  
Financial Statements ◽  
International Standards ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Accounting Estimates

In the textbook the system of the international standards of the financial reporting (IFRS) is analysed: her principles, formation, advantages and expediency of introduction. MFSO are considered all: submission of financial statements; stocks; report on cash flow; accounting policies, changes in the estimated accounting estimates and mistakes, turnkey contracts, etc. Also reflection of financial rent is given in the reporting of the tenant under RAS and MFSO, etc. For the students studying in the Economy and Management directions and also for all comers to increase the level in the field of a training of the consolidated reporting.

scholarly journals Assessment of enterprises liabilities in application conditions of international financial reporting standards

2020 ◽  
pp. 45-56
Author(s):  
Valentina Kubik ◽  
Ruslan Volchek
Keyword(s):  
Discount Rate ◽  
Financial Reporting ◽  
Risk Premium ◽  
Balance Sheet ◽  
Fair Value ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Different Types

The article considers the peculiarities of accounting assessment of short-term and long-term liabilities of enterprises based on different types of current value. It is established that the IAS and Ukrainian Accounting Standards don’t quite clearly formulate the provisions regarding the assessment at which accounting items should be evaluated when recognized and reflected in the balance sheet. This negatively affects to the quality of the reports provided by enterprises and requires the development of methodologies that specify the application of different types of assessment of enterprises liabilities, depending on the purpose of assessment. The subject of research is the procedures for evaluation the value of the enterprise’s liabilities. The purpose of the article is to solve the problem of enterprises liabilities evaluation at the present stage of accounting development in the context of international financial reporting standards application in Ukraine. The research methods are general scientific, namely: abstraction and concretization – for providing recommendations regarding the correct determination of the fair value of enterprises’ liabilities. It is proved, that the choice of the evaluation type of liabilities depends on the time of their implementation and the results of business negotiations. Recommendations for the correct evaluation of liabilities and disclosure information about them in the financial statements are formulated. It is recommended to reflect in the order of enterprise accounting policy the criteria according to which the discount rate is selected for determining the present value of various types of long-term liabilities. It is expedient to substantiate the materiality of the rate deviation on long-term interest loans in accordance with the terms of the agreements and the market interest rate. Indicators that can be used to determine the risk premium when choosing the discount rate are specified.

Environmental liabilities and diversity in practice under international financial reporting standards

2017 ◽  
Vol 30 (2) ◽  
pp. 378-403 ◽  
Author(s):  
Thomas Schneider ◽  
Giovanna Michelon ◽  
Michael Maier
Keyword(s):  
Discount Rate ◽  
Financial Reporting ◽  
Oil And Gas ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Firm Characteristics ◽  
Environmental Liabilities ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Major Increase

Purpose The purpose of this paper is to encourage accounting regulators to address diversity in practice in the reporting of environmental liabilities. When Canada changed to International Financial Reporting Standards (IFRS) in 2011, Canadian regulators asked the IFRS Interpretations Committee to interpret whether the discount rate to value environmental liabilities should be a risk-free discount rate. Old Canadian GAAP, and current US GAAP, allow for a higher discount rate, resulting in commensurately lower liabilities. International regulators refused to address this issue expecting no diversity in practice in Canada. Design/methodology/approach The focus is on a sample of Canadian oil and gas and mining firms. These domestic industries play a major role internationally and have significant environmental liabilities. The method is empirical archival, tracking firm characteristics and discount rate choice on transition to IFRS. Findings There is significant diversity in practice. About one-third of the sample firms choose a higher discount rate, avoiding a major increase in environmental liabilities on transition to IFRS. The evidence suggests that these firms have relatively larger environmental liabilities and that the discount rate decision is a strategic choice. Research limitations/implications The sample is based on one country and may only be reflecting local anomalies that have no broader implications. Practical implications Diversity in practice in accounting for environmental liabilities is not acceptable. Accounting regulators should act to create consistent and comparable reporting practice. Social implications Firms and managers facing larger environmental liabilities can choose to minimize environmental liabilities under IFRS, while it is the general public and society at large that bear the ultimate risk. Originality/value The paper pushes forward the debate on whether recognized environmental liabilities should reflect the interests of equity investors, or if other investors and stakeholders should be taken into account.

Pengaruh Konvergensi International Financial Reporting Standards (Ifrs) Terhadap Penghindaran Pajak(Tax Avoidance)

2018 ◽  
Vol 26 (2) ◽  
pp. 158-169
Author(s):  
Umi Wahidah ◽  
Sri Ayem
Keyword(s):  
Financial Reporting ◽  
Tax Evasion ◽  
Stock Exchange ◽  
Control Variable ◽  
Tax Avoidance ◽  
Sampling Technique ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Control Variables ◽  
Financial Reporting Standards

This research aimed to examine the effect of the convergence of International Financial Reporting Standards (IFRS) on tax avoidance on companies listed in Indonesia Stock Exchange. Tax avoidance that used in this research was Cash Efective Tax Rate (CETR). This research is also use the control variable to get other different influence that different such as CSR, size, and earning management (EM. This research used populations sector of transport service companies that listed in Indonesia Stock Exchange. The data of this research taken from secondary data that was from the Indonesia Stock Exchange in the form of Indonesian Capital Market Directory (ICMD) and the annual report of the company 2011-2015. The method of collecting sample was purposive sampling technique, the population that to be sampling in this research was populations that has the criteria of a particular sample. Companies that has the criteria of the research sample as many as 78 companies. The method of analysis used in this research is multiple regression analysis. Based on regression testing shows that the convergence of International Financial Reporting Standards (IFRS) has a positiveand significant impact on tax evasion. This shows that IFRS convergence actually improves tax evasion practices. The control variables of firm size and earnings management also significantly influence the application of IFRS in improving tax avoidance practices, while CSR control variables have no role in convergence IFRS in improving tax evasion practice.

Sign in / Sign up

Export Citation Format

Share Document