Accounting for Software Development Costs and Information Asymmetry

2005 ◽  
Vol 80 (4) ◽  
pp. 1211-1231 ◽  
Author(s):  
Emad Mohd
Keyword(s):  
Software Development ◽  
Information Asymmetry ◽  
Cost Of Capital ◽  
Software Industry ◽  
High Tech ◽  
Bid Ask Spread ◽  
Development Costs ◽  
Software Firms ◽  
The Cost ◽  
The Impact

I investigate the impact of implementing SFAS No. 86, which provides an exception to the GAAP requirement of the immediate expensing of research and development (R&D), on information asymmetry. Using bid-ask spread and share turnover as proxies for information asymmetry, I find that after the introduction of SFAS No. 86, information asymmetry decreases for software firms relative to that of other high-tech firms. Within the software industry, I find that information asymmetry is significantly lower for firms that capitalize (capitalizers) than for those who expense (expensers) software development costs. Thus, accounting for software development costs per SFAS No. 86 reduces information asymmetry and, consequently, the cost of capital. As well, investors' uncertainty about the future benefits of software development costs is reduced when firms capitalize these costs.

scholarly journals Information Asymmetry in the Post-IFRS Adoption Period: Evidence from Developing Countries

2018 ◽  
Vol 3 (4) ◽  
pp. 114-123
Author(s):  
Juniarti Juniarti ◽  
Beatrice Marcellina ◽  
Alvita Angela
Keyword(s):  
Developing Countries ◽  
Information Asymmetry ◽  
Cost Of Capital ◽  
Developed Countries ◽  
The Philippines ◽  
Jel Classification ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
Bid Ask Spread ◽  
The Cost

Objective - The adoption of IFRS aims to reduce the level of information asymmetry. Prior studies conducted in developed countries prove that the adoption of IFRS enhances transparency and diminishes information asymmetry. However, in developing countries with a low level of openness, limited regulation, and more centralized ownership, the ability of IFRS to reduce information asymmetry remains unknown. To address this issue, this study aims to investigate whether IFRS adoption will reduce information asymmetry in some developing countries in South East Asia. Methodology/Technique - This research is applied in three developing countries: Indonesia, the Philippines and Thailand. Information asymmetry is proxied by the cost of capital using the Easton model (2004) and a bid-ask spread. Listed firms from the three countries are selected as the research sample resulting in 5.313 firm-years for the period between 2007 and 2016. Findings - This study concludes that the adoption of the IFRS decreases information asymmetry in developing countries. These finding confirm that the benefit of the adoption is the same as in developed countries, despite the level of law enforcement in developing countries being lower. Managers, standard authorities and investors must note that the IFRS conveys benefits to the market, which increases transparency by asking lower returns and valuing company stocks appropriately. Novelty - This study examines the benefits of the adoption of the IFRS in reducing information asymmetry in some emerging countries to enhance the generalization of the results from prior studies that are mostly conducted in developed countries. Type of Paper Empirical Keywords: Bid-ask Spread; Cost of Capital; Information Asymmetry; IFRS Adoption. JEL Classification: M41, M48.

It's High Time for Application Frameworks for Healthcare

2005 ◽  
pp. 11-32
Author(s):  
Efstathios Marinos ◽  
George Marinos ◽  
Antonios Kordatzakis ◽  
Maria Pragmatefteli ◽  
Aggelos Georgoulas ◽  
...  
Keyword(s):  
Software Development ◽  
Software Industry ◽  
High Time ◽  
Application Framework ◽  
Work Done ◽  
The Impact

This chapter discusses the impact of adopting application frameworks in the healthcare (HC) domain. It argues the shortcomings of existing HC applications and systems, examines the benefits of application frameworks use during and after the software development, and presents such an application framework. The authors hope that this chapter will put on the table the discussion about the necessity of application frameworks in HC because they strongly believe that the software industry can tremendously benefit from the work done so far in the area of the HC standardization, in order to provide HC-specific application frameworks that will make software development easier and more efficient.

Methodology Fit in Offshoring Software Development Projects

2014 ◽  
Vol 27 (4) ◽  
pp. 66-81
Author(s):  
Peng Xu ◽  
Yurong Yao
Keyword(s):  
Software Development ◽  
Knowledge Sharing ◽  
Project Performance ◽  
Viable Alternative ◽  
Development Projects ◽  
Relational Capital ◽  
Software Companies ◽  
Development Costs ◽  
Labor Resources ◽  
The Impact

Offshoring has become a viable alternative for companies to lower software development costs and leverage labor resources worldwide. To achieve success in offshoring software development projects, a vendor must choose appropriate development methodologies. This study aims to examine how methodology fit affects offshoring project performance. It proposes that methodology fit affects project performance through interfirm knowledge sharing between vendors and clients. In addition, the impact of methodology fit on knowledge sharing is dependent on relational capital between vendors and clients. A survey was conducted among software companies in China that provide offshoring services. 108 completed questionnaires were collected. The results confirm this article's hypotheses.

scholarly journals The Impact of Housing Density on Site Development Costs

1977 ◽  
Vol 6 (2) ◽  
pp. 263-274
Author(s):  
Leslie E. Small ◽  
Donn A. Derr
Keyword(s):  
Price Index ◽  
Consumer Price Index ◽  
Housing Density ◽  
Middle Income ◽  
The Past ◽  
Site Development ◽  
Income Groups ◽  
Development Costs ◽  
The Cost ◽  
The Impact

During the past decade, the cost of constructing new homes has risen dramatically. While the overall consumer price index rose by 74 percent between 1967 and the end of 1976, the cost of constructing new housing rose by about 103 percent nationally. This trend in costs has priced a growing proportion of lower and middle income groups out of the market for new houses. The national average price for new housing is currently $52,000 per unit. This has led to expressions of public concern that efforts need to be undertaken to find ways by which these low and middle income groups can obtain access to new housing.

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