scholarly journals Valuing An Emerging International Technology Company

2011 ◽  
Vol 7 (1) ◽  
Author(s):  
John Zimmerman
Keyword(s):  
Balance Sheet ◽  
Cumulative Effect ◽  
Fair Value ◽  
Financial Accounting ◽  
Publicly Traded ◽  
Accounting Standard ◽  
Financial Valuation ◽  
Accounting Principle ◽  
Fair Valuation ◽  
Interim Period

The requirements of Financial Accounting Standard Board (FASB) 142 provide an excellent opportunity to examine various financial valuation methods used to determine a company’s value.  Under FASB 142, goodwill and intangible assets with indefinite useful lives are no longer amortized, but instead tested for impairment at least annually in accordance with the provisions. Any impairment loss has to be measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle in an organization’s first interim period. The impairment test requires an accurate and fair valuation of the asset in question.  This case is based upon the valuation dilemma faced by Integrated Silicon Solution (NASDAQ: ISSI), a publicly traded international technology company, in late 2008. ISSI had made several acquisitions and carried substantial goodwill. Since ISSI was publicly traded, a public market value was available but the financial crisis of 2008 caused the company to consider other methods, as is allowed under FASB 142. The case uses both the income and comparable market approaches to arrive at a fair value, and this value is used to determine if impairment for the goodwill the company carried on its balance sheet existed.

scholarly journals Deferred Tax Accounting Concepts and Their Bond to the Accounting Ideologies

2021 ◽  
Vol 8 (4) ◽  
pp. 34-50
Author(s):  
A. A. Aksent’ev
Keyword(s):  
Balance Sheet ◽  
Financial Accounting ◽  
Corporate Management ◽  
Controversial Issues ◽  
Deferred Taxes ◽  
Accounting Standard ◽  
Domestic Practice ◽  
Important Object ◽  
Deferred Tax ◽  
Tax Accounting

Deferred taxes are an important object of accounting observation to judge the degree of discrepancies between financial and tax accounting. Meanwhile, the information discloses to users the effects arising from the tax planning tools usage for corporate management and forecasting cash outflows associated with the payment of income tax in the future. The paper formalized two concepts of accounting for deferred taxes in the form of models: temporary and timing differences associated with accounting ideologies. The author ha structured the logic of reflecting deferred taxes on accounting accounts using the balance sheet and “cost” methods. Analysis of foreign experience and domestic practice made it possible to conclude that there are controversial issues on the assessment of deferred taxes in reporting, including at present value. Also, the author revealed discrepancies in Russian Accounting Standard (PBU) 18/02 which were conceptually different from a similar international standard and conflicting with it in a number of theoretical and methodological positions. The research results are aimed at scientific and practical workers in the field of financial accounting, taxation and audit.

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

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

Fair Valuation of Liabilities

2002 ◽  
Vol 8 (2) ◽  
pp. 203-299 ◽  
Author(s):  
C.J. Hairs ◽  
D.J. Belsham ◽  
N.M. Bryson ◽  
C.M. George ◽  
D.J.P. Hare ◽  
...  
Keyword(s):  
Financial Reporting ◽  
Working Party ◽  
Fair Value ◽  
General Purpose ◽  
International Accounting Standards ◽  
Accounting Standard ◽  
Market Values ◽  
Life Assurance ◽  
The United Kingdom ◽  
Fair Valuation

ABSTRACTA project to develop an Accounting Standard for Insurance, with the aim of enhancing understandability, relevance, reliability and comparability of general purpose financial reporting for insurance worldwide, is being progressed by the International Accounting Standards Board. The basis of the proposals is that assets and liabilities be shown at fair values (market values for quoted instruments). This paper, prepared by a Working Party established by the Life Board of the United Kingdom actuarial profession, summarises and comments upon a number of the principal features of the proposals, as they have emerged up to September 2001. The paper goes on to consider how a system of reporting for prudential regulatory purposes might be built upon a fair value general reporting base, summarising the thinking of a number of other bodies, proposing certain principles and suggesting lines of development. The appendices to the paper discuss a number of issues in further depth and present some illustrative results of some investigations into applying fair value methods in practice. The emphasis of the paper is on reporting for life assurance business, although many of the principles apply equally to general insurance.

scholarly journals The Financial Accounting Standards Board’s Fair Value Mandate: Are Level 3 Assets and Liabilities Being Measured Accurately?

2018 ◽  
Vol 7 (2) ◽  
pp. 33
Author(s):  
Robert J. Cochran
Keyword(s):  
Financial Institutions ◽  
Balance Sheet ◽  
Accounting Standards ◽  
Market Value ◽  
Fair Value ◽  
Financial Accounting ◽  
Mortgage Loan ◽  
Specific Level ◽  
Additional Argument ◽  
Level 3

This study asks the following question with respect to level 3 fair value assets and liabilities: are level 3 fair value assets and liabilities being measured accurately?  An argument is made that since level 3 markets do not exist (as defined in ASC 820), it is not possible to determine a level 3 value.  Data is examined, both pre- and post- SFAS No. 157 with respect to a specific level 3 asset that can be found on the balance sheet of most publically traded financial institutions, mortgage loan servicing rights.  The data suggests that the FASB’s attempt to clarify fair value had no effect on the levels of capitalization of mortgage loan servicing rights.  An additional argument is made that the language in ASC 820 undermines the requirement that level 3 fair values reflect a “market” value rather than an “investment” value.

A Case Integrating Financial and Tax Accounting Using the Balance Sheet Approach to Account for Income Taxes

2017 ◽  
Vol 32 (4) ◽  
pp. 41-49 ◽  
Author(s):  
Melissa P. Larson ◽  
Troy K. Lewis ◽  
Brian C. Spilker
Keyword(s):  
Income Tax ◽  
Balance Sheet ◽  
Financial Statements ◽  
Income Taxes ◽  
Financial Accounting ◽  
Financial Statement ◽  
Publicly Traded ◽  
Taxable Income ◽  
Accounting For Income Taxes ◽  
Advanced Version

ABSTRACT This case guides students through the process of reconciling financial (book) income to its taxable income, calculating the tax provision, preparing the income tax footnote disclosure, and completing Form 1120, Schedule M-1 for a fictitious publicly traded client. In the case, students are presented with the company's financial statements, including supporting schedules, and a tax basis balance sheet. Students are asked to calculate the tax provision and construct the income tax footnote as a pre-class assignment. In class, students debrief the tax provision calculation and income tax footnote and use information contained in the income tax footnote to reconcile the company's book to taxable income. Students completing this case should be able to (1) interpret the differences between a book basis balance sheet and a tax basis balance sheet, (2) create the income tax footnote disclosure using the ASC 740 balance sheet approach to accounting for income taxes, and (3) use information in the financial statement footnote and related disclosures to determine a company's book-tax differences and reconcile its book to taxable income. This case is designed for an intermediate financial accounting or tax course but an advanced version of the case could be used in a graduate financial accounting or graduate tax course.

Accounting for Market Equilibrium – Comparing the Revenue-Expense to the Balance-Sheet Approach

2019 ◽  
Vol 0 (0) ◽  
Author(s):  
Eduard Braun
Keyword(s):  
Financial Reporting ◽  
Market Equilibrium ◽  
Balance Sheet ◽  
Fair Value ◽  
Financial Accounting ◽  
Market Process ◽  
Net Income ◽  
Fair Value Accounting ◽  
Suitable Framework ◽  
Value Measurement

AbstractThis paper combines the market process approach developed by the Austrian School of Economics with the theory of capital as worked out by the Historical School in order to provide a suitable framework for discussing the two competing approaches to financial accounting. Within this framework, it becomes clear that the revenue-expense approach with its emphasis on actually realized, historical transactions plays an important role in creating a tendency towards market equilibrium. Net income determined according to this approach provides information to the market on where there are gaps in the price structure. The balance-sheet approach, on the other hand, and particularly fair value measurement take market equilibrium for granted. Based on fair value accounting, an equilibrium could never be accomplished in the first place. Ironically, in order to be applicable, the balance-sheet approach presupposes the perfect working of the market process, including financial reporting based on the revenue-expense approach.

scholarly journals Recognizing Intellectual Capital As An Asset

2014 ◽  
Vol 12 (2) ◽  
pp. 177 ◽  
Author(s):  
Mary Fischer ◽  
Treba Marsh
Keyword(s):  
Knowledge Management ◽  
Intellectual Capital ◽  
Measurement Techniques ◽  
Balance Sheet ◽  
Fair Value ◽  
Measurement Model ◽  
Financial Accounting ◽  
Definition Of ◽  
Value Measurement ◽  
Stakeholder Communication

The revised definition of an asset by the FASB and GASB gives way to the recognition of the fair value of another off-balance sheet value. Interest in recognizing intellectual capital as an asset of the organization has grown out of dissatisfaction with traditional financial accounting and reporting directed toward manufacturing, trading of goods, and service activities which ignore the organizational asset values based on knowledge, expertise and technology. The growing interest in intellectual capital (IC) and knowledge management reflects an awareness of the need for identification, utilization, and measurement of an organizations most valuable asset. This paper identifies the importance of the IC value, discusses the research emphasis placed on it by others, and develops a fair value measurement model. The model provides a basis not only for identifying crucial aspects of effective knowledge management, but also for emphasizing the interdependence, and the synergy that may be created through recognition. Measurement techniques are presented together with a process for stakeholder communication that establishes the groundwork for future empirical investigation and analysis.

scholarly journals Cryptocurrency Assets in the Financial Accounting Systems

2020 ◽  
Vol 3 (45) ◽  
pp. 184-189
Author(s):  
A. A. Makurin ◽  
Keyword(s):  
Financial Reporting ◽  
Intangible Assets ◽  
Balance Sheet ◽  
Fair Value ◽  
Financial Accounting ◽  
Accounting Systems ◽  
Financial Investment ◽  
Financial Reporting Standards ◽  
The One ◽  
Definition Of

The article deals with constructing an asset accounting process and an algorithm for recognizing an object as an asset. The main approaches to the reflection of cryptocurrency in financial accounting are analyzed. The study showed that International Financial Reporting Standards (IFRS) still lack specific clarifications on the correctness of accounting and recognition of cryptocurrencies. Cryptocurrencies are suggested to be recognized as, intangible assets on the one hand, and as inventories, on the other. The research shows that before starting the process of accounting for any asset, it is necessary to determine, whether such a resource meets the definition of an asset. The article proves that cryptocurrency is an asset. However, attaching cryptocurrency to a certain group of assets turns out to be rather problematic. The main approaches to doing it are analyzed. Speaking formally, cryptocurrency is considered to be cash or cash equivalents. Cash and cryptocurrencies have been compared, and the main distinguishing features of these two assets have been considered. The conclusion is made that cryptocurrency should be evaluated at fair value, indicating the date of evaluation to fix actual market conditions. The measure of cryptocurrency when reflected in the financial reporting is the US dollar or its equivalent in the national currency as at the balance sheet date. The research has shown that depending on the type of the enterprise activity, cryptocurrency should be determined in the financial reporting, or the «balance sheet», as «intangible assets» (line code 1000), and the primary value of such an asset corresponds to line 1001, or inventories (line code 1100). Also, if the company’s accounting policy states that cryptocurrency is a financial investment, it should be reflected in line 1160.

scholarly journals Perlakuan Akuntansi Aset Biologis Tanaman Tebu Pada PTPN XI PG. Poerwodadie Magetan

2020 ◽  
Vol 1 (2) ◽  
pp. 51-58
Author(s):  
Sasmito Widi Nugroho ◽  
Merlin Nilam Lapenia ◽  
Shinta Noor Anggraeny
Keyword(s):  
Agricultural Sector ◽  
Balance Sheet ◽  
Financial Statements ◽  
Fair Value ◽  
Financial Accounting ◽  
Case Study Approach ◽  
Literature Study ◽  
Study Approach ◽  
Acquisition Costs

Abstract— This research aims to determine the accounting treatment of biological assets in terms of recognition, measurement and presentation in financial statements and also aims to determine the comparison of the accounting treatment of biological assets of companies based on Financial Accounting Standards namely PSAK 69 Agriculture. This study uses qualitative research methods with a case study approach conducted at PTPN XI PG. Poerwodadie. Data collected by interview, documentation and literature study. PSAK 69 regulates the accounting treatment for the agricultural sector which includes the recognition, measurement and disclosure of agricultural activities. The results showed that PTPN XI PG. Poerwodadie which is engaged in plantations recognizes biological assets in the form of estate crops classified into immature and mature plants. Biological assets are measured at cost and are presented on the balance sheet in the heading of Non-current Assets. PT. Perkebunan Nusantara XI PG. Poerwodadie still has not applied PSAK 69 Agriculture, it can be seen in the company's financial statements that measure its biological assets at fair value rather than acquisition costs. Keywords—: Biological Asset Accounting; Financial Statements; PSAK 69.

Earnings Management and Derivative Hedging with Fair Valuation: Evidence from the Effects of FAS 133

2014 ◽  
Vol 90 (4) ◽  
pp. 1437-1467 ◽  
Author(s):  
Jongmoo Jay Choi ◽  
Connie X. Mao ◽  
Arun D. Upadhyay
Keyword(s):  
Earnings Management ◽  
Income Smoothing ◽  
Financial Accounting ◽  
Accounting Standard ◽  
Earnings Volatility ◽  
Discretionary Accrual ◽  
Smoothing Methods ◽  
Hedge Accounting ◽  
Reported Earnings ◽  
Fair Valuation

ABSTRACT Barton (2001) and Pincus and Rajgopal (2002) show that earnings management through discretionary accruals and derivative hedging are partial substitutes in smoothing earnings before 1999. In this study, we investigate whether Financial Accounting Standard (FAS) 133 regarding hedge accounting in 2000 has influenced the relative merit of the two earnings-smoothing methods. Based on a sample of S&P 500 nonfinancial firms during 1996–2006, we find that the substitution relation between derivative hedging and discretionary accrual is significantly attenuated after FAS 133 implementation. We also document a significant increase in earnings volatility associated with derivative hedging post-FAS 133. These results are robust to the use of various model and method specifications, as well as controlling for contemporaneous macroeconomic and regulatory shocks. Overall, our results suggest that a material change in an accounting rule regarding derivatives can influence the level and volatility of reported earnings, as well as the method of income smoothing. JEL Classifications: G32; M41; M48

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