IFRS 16 Leases: Standard's novation and the impact of the COVID-19 pandemic on the accounting and reporting information disclosure

2020 ◽  
Vol 23 (9) ◽  
pp. 962-980
Author(s):  
M.A. Vakhrushina
Keyword(s):  
Financial Reporting ◽  
Information Disclosure ◽  
Service Industry ◽  
Negative Impact ◽  
Theory And Practice ◽  
International Accounting Standards ◽  
Distinctive Features ◽  
Additional Information ◽  
Logical Method ◽  
The Impact

Subject. This article discusses the methodological features of the present-day accounting for rental transactions and disclosure of the relevant reporting information in accordance with IFRS, taking into account the impact of the COVID-19 pandemic on organizations' activities. Objectives. The article aims to argue the present-day interpretation of rental transactions and their reflection in accounting and reporting in connection with the entry into force of IFRS 16 Leases, based on an analysis of the content of IFRS 16 amendments published by the International Accounting Standards Board (IASB) in May 2020 in connection with the COVID-19 pandemic. The article also intends to systematize the basic requirements for disclosure of additional information in financial statements in connection with the negative impact of the COVID-19 pandemic on the activities of Russian organizations, and define promising directions of the development of the theory and practice of accounting of rental operations in accordance with the existing paradigm of IFRS development. Methods. For the study, I used content analysis, systematization, and classification techniques, and the abstract-logical method. Results. The article describes the distinctive features of the new methodological approaches to disclosure in accordance with IFRS 16 compared to the previous standard. The article also identifies possible approaches to the financial reporting of lease-related concessions considering COVID-19. Conclusions. The impact of the COVID-19 pandemic has been particularly devastating for the service industry concerning rental operations. The article arrives at the conclusion that it is necessary and possible for tenants to disclose the associated additional reporting information.

scholarly journals Empirical Analysis of Non-Financial Reporting by Spanish Companies

2018 ◽  
Vol 8 (3) ◽  
pp. 29 ◽  
Author(s):  
Laura Sierra-Garcia ◽  
Maria Garcia-Benau ◽  
Helena Bollas-Araya
Keyword(s):  
Financial Reporting ◽  
Information Disclosure ◽  
Listed Companies ◽  
Regulatory Compliance ◽  
Financial Information ◽  
The European Union ◽  
Royal Decree ◽  
Additional Information ◽  
Eu Directive ◽  
The Impact

Spain is one of the European countries that is the most strongly committed to the presentation of non-financial information. In 2017, Spain adapted its legislation to Directive 2014/95/EU through Royal Decree-Law 18/2017, which required Public Interest Entities (PIEs) to provide information in accordance with the requirements of the European Union (EU) Directive, with respect to financial years from 1 January 2017. Our research is focused on Spanish IBEX-351 listed companies and seeks to identify current trends in non-financial reporting. To our knowledge, the present paper is the first study to examine the impact made in Spain by the legislative changes. Our aim is to analyse the publication of non-financial information by Spanish listed companies whose first reports in this regard were made from early 2018. Specifically, we consider the impact of this information disclosure, determining whether the companies in question restrict themselves to meeting regulatory requirements or whether they go further and voluntarily supply additional information. Our findings show that the level of regulatory compliance produced is associated with the business sector in which the company operates. We also show that the highest rates of disclosure of non-financial information correspond to companies that provide this information in the sustainability report.

scholarly journals Signalling and Legitimacy Theories for Explaining Climate Information Disclosure by Russian Companies

2021 ◽  
Vol 15 (2) ◽  
pp. 16-26
Author(s):  
Elena Fedorova ◽  
Maria Martynova
Keyword(s):  
Climate Change ◽  
Information Disclosure ◽  
Negative Impact ◽  
State Ownership ◽  
Absolute Amount ◽  
Distinctive Features ◽  
Debt Burden ◽  
Industry Affiliation ◽  
Company Growth ◽  
The Impact

This paper studies the factors influencing the level of climate-related disclosure by Russian companies. It has several distinctive features in comparison to previous works: 1) climate change disclosure by Russian companies is studied for the first time; 2) textual analysis is used to evaluate the level of disclosure, and a new Russian glossary on climate change is compiled; 3) a unique set of indicators is used to assess the impact of factors on climate change disclosure. Legitimacy and signalling theories are used to formulate the hypotheses. The sample consists of 47 Russian companies with the largest market capitalization. Their 235 annual and sustainability reports for 2015-2019 are analysed. Using regression analysis, we show that a company’s absolute amount of greenhouse gas emissions, size, industry affiliation, and CDPrating positively affect its level of disclosure about climate change. In contrast, state ownership and a high debt burden have a negative impact. At the same time, the newness of assets, capital expenditures, interest coverage and company growth opportunities have no effect on climate change disclosure. Empirical results have confirmed the applicability of legitimacy theory to the Russian market. The present study will provide investors and regulators with tools for predicting a company’s impact on climate based on its level of climate change disclosure.

Particularities of the independent auditor's report on reliability of accounting (financial) statements for 2019: COVID-19 as qualitatively essential information (Part 2)

2020 ◽  
Vol 23 (7) ◽  
pp. 777-799
Author(s):  
O.I. Shvyreva ◽  
Z.I. Kruglyak ◽  
A.V. Petukh
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Economic Situation ◽  
Risk Disclosure ◽  
Essential Information ◽  
Logical Method ◽  
Annual Reporting ◽  
The Face ◽  
Key Aspects ◽  
The Impact

Subject. This article discusses the issues related to the practice of financial reporting in the face of uncertainties caused by the coronavirus contagion, as well as the specifics of the audit strategy and formation of an audit opinion on this reporting. Objectives. The article aims to identify the quality characteristics of financial reporting prepared in the context of the COVID-19 pandemic and justify the key aspects of assurance engagement completion in an extremely uncertain epidemiological and economic situation. Methods. For the study, we used an abstract-logical method, content analysis techniques, systematization, and classification. Results. Analyzing the impact of the extremely uncertain epidemiological and economic situation on financial statements, the article clarifies aspects of disclosure of events after the reporting date and threats to business continuity in the annual reporting of economic entities. The article identifies possible alternative procedures and algorithms to obtain proper evidence when it is insufficient in the face of the inability to meet certain audit standards requirements in a remote audit environment. The article defines the impact of COVID-19 risk disclosure on the structure of the audit report and opinion. Relevance. The results of the study can be used in the practical activities of economic entities that prepare financial statements in the face of significant uncertainty, as well as auditors and audit organizations.

scholarly journals The Impact of Brand Equity on Employee’s Opportunistic Behavior: A Case Study on Enterprises in Vietnam

2021 ◽  
Vol 14 (4) ◽  
pp. 164
Author(s):  
Quang Bach Tran ◽  
Quoc Hoi Le ◽  
Hoai Nam Nguyen ◽  
Dieu Linh Tran ◽  
Thi Thuy Quynh Nguyen ◽  
...  
Keyword(s):  
Employee Engagement ◽  
Brand Equity ◽  
Structural Equation ◽  
Structural Model ◽  
Negative Impact ◽  
Theory And Practice ◽  
Emotional Engagement ◽  
Opportunistic Behavior ◽  
Corporate Brand ◽  
The Impact

Brand is considered a valuable asset that a business wants to create and maintain growth throughout its business cycle. This paper examines the impact of corporate brand equity on employees’ opportunistic behavior. The paper uses quantitative research methods, through linear SEM (Structural Equation Modelling) analysis of structural model with a scale of 609 samples of employees of enterprises in Vietnam. The research results show that corporate brand equity has a negative impact on employees’ opportunistic behavior. In the relationship between these two factors, trust and emotional engagement act as intermediate factors. Additionally, the research demonstrates that trust has a positive effect on all three components of employee engagement, including emotional engagement, computational engagement, and standards-based engagement. On that basis, the research suggests a number of recommendations to minimize the opportunistic behavior of employees in the enterprise. The findings of this study have shown the importance and impact of brand equity on employee opportunistic behavior. These are meaningful contributions in both theory and practice to help businesses gain deeper insight into brand equity and the need to pay attention to building and developing durable brand equity for businesses. At the same time, it is an important basis for the next research projects.

scholarly journals A literature review on the impact of IAS/IFRS and regulations on quality of financial reporting

2016 ◽  
Vol 6 (4) ◽  
pp. 102-114 ◽  
Author(s):  
Newman Wadesango ◽  
Edmore Tasa ◽  
Khazamula Milondzo ◽  
Ongayi Vongai Wadesango
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Financial Statements ◽  
Conclusive Evidence ◽  
Financial Reporting Quality ◽  
International Accounting Standards ◽  
Ifrs Adoption ◽  
The Impact

The International Accounting Standards Board (IASB) in its objectives and preamble, presume that IFRS adoption and perceived compliance to regulatory framework is associated with increased financial reporting quality. Based on these assumptions, this desktop study reviewed several documents to determine whether the IFRS adoption has led to increased financial reporting quality in Zimbabwe. The researchers reviewed literature on how the IAS/IFRS and regulations affect the financial reporting quality of listed companies. The factors around IFRS adoption were identified (mandatory, voluntary and convergence) and discussed in relation to the financial reporting quality. Evidence from previous studies conducted in line with this same issue shows that there is no conclusive evidence on how IFRS and regulations affect the financial reporting quality. Issues to be addressed in further studies include the importance of financial statements prepared under IFRS framework and the importance of compliance with accounting and auditing requirements.

The bidirectional relationship between ESG performance and earnings management – empirical evidence from Germany

2019 ◽  
Vol 10 (4) ◽  
pp. 322-338 ◽  
Author(s):  
Patrick Velte
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Negative Impact ◽  
Social Performance ◽  
Negative Influence ◽  
Content Type ◽  
Thomson Reuters ◽  
Tier System ◽  
Bidirectional Relationship ◽  
The Impact

Purpose This study aims to focus on environmental, social and governance (ESG) performance as a whole and individually in its three pillars and their influence on earnings management. Design/methodology/approach Companies listed on the German Prime Standard (DAX30, TecDAX and MDAX) for the business years 2011-2017 (548 firm-year observations) are included in the empirical quantitative study. A correlation and regression analysis is conducted to analyze the impact of ESG performance as determined by the Asset4 database of Thomson Reuters on accruals-based earnings management (AEM) and real earnings management (REM). Findings ESG performance has a negative influence on AEM but not on REM. Moreover, by dividing the three different factors of ESG performance, governance performance has the strongest negative impact on AEM in comparison to environmental and social performance. This study also suggests a bidirectional relationship between ESG performance and earnings management. Originality/value The analysis makes a key contribution to research as the link between ESG performance and their three components and earnings management are analyzed for the German two-tier system for the first time. Corporate practice, regulators and researchers should recognize that ESG performance and financial reporting should be discussed together.

scholarly journals Assessment of Government Internal Control Systems on Financial Reporting Quality in Ghana: A Case Study of Ghana Revenue Authority

2018 ◽  
Vol 10 (11) ◽  
pp. 40
Author(s):  
Wonder Agbenyo ◽  
Yuansheng Jiang ◽  
Prince Komla Cobblah
Keyword(s):  
Control Systems ◽  
Financial Reporting ◽  
Internal Control ◽  
Negative Impact ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Quality Reporting ◽  
The Impact

Internal control systems cannot be underestimated as it serves as the lifeblood of most institutions in terms of its imperative roles that it plays in both tangible and intangible assets of an organization. Internal control actions on quality financial report state positive goals more especially when all parties involved adhere to their duties; thus, making the quality of financial reporting comparable, understandable, relevant, and reliable. In this regard, this study investigated the impact of government internal control systems on financial reporting quality in Ghana using Ghana Revenue Authority as the case study. Specifically, the study examined the nature and quality of financial reporting and the impact of government internal control systems on financial reporting quality. Both quota and simple random sampling techniques were used to select fifty (50) persons as the sample size of the study. Questionnaires were used to obtain data. The correlation matrix was used to examine the relationship between government internal control systems and financial reporting quality. The study finds out that contrary to apriori expectation sign monitoring as an element of internal control system has a negative impact on the financial quality reporting but was however statistically significant. The study also revealed that with a unit increase in the collection performance, the financial reporting quality of GRA will improve. The study recommended that the government should ensure that the internal control systems are well monitored and regulated. 

scholarly journals Fair value accounting and earning management: The impact of unobservable inputs on earning quality. Evidence from the US

2019 ◽  
Vol 16 (2) ◽  
pp. 8-18 ◽  
Author(s):  
Marco Pompili ◽  
Marco Tutino
Keyword(s):  
Financial Reporting ◽  
Negative Impact ◽  
Evaluation Process ◽  
Strong Relationship ◽  
Fair Value ◽  
Financial Instruments ◽  
Fair Value Accounting ◽  
Earning Quality ◽  
The Impact

Accounting standard boards (IASB and FASB) are aimed at designing high-quality standards able to increase transparency and comparability of financial reporting. They have chosen fair value accounting (FVA) approach to improve the quality of financial reporting and at the same time help financial reporting users in the decision-making process. During recent years, an intense debate has arisen about the trade-off between relevance and reliability of accounting information using this approach. Many authors outline problems related to the fair value hierarchy valuation of financial instruments, in particular, the discretionary use of unobservable inputs in financial instruments valuation process in support of earnings management. Tutino and Pompili (2018) have identified a general negative correlation between the extent of FVA and earning quality. Stating this, the main objective of the paper, using the same approach of the previous one, is to identify the specific impacts of unobservable inputs on earning quality. Theory and previous literature suggest a major negative impact of unobservable inputs than observable ones on the quality of information provided within financial reporting. Results show a negative and strong relationship between FVA and earning quality for US banks that do not depend on the hierarchy of input used in the evaluation process. These results suggest new considerations on the reliability of fair value concerning the possibilities of manipulation given to the management with this approach.

A materialistic perspective of consumer decision-making styles

2019 ◽  
Vol 12 (2) ◽  
pp. 231-248
Author(s):  
Sartaj Chaudhary ◽  
Ajoy Kumar Dey
Keyword(s):  
Decision Making ◽  
School Children ◽  
Negative Impact ◽  
Second Order ◽  
Theory And Practice ◽  
Consumer Decision Making ◽  
Consumer Decision ◽  
Content Type ◽  
Decision Making Styles ◽  
The Impact

Purpose Materialism has become a topic of increasing interest to researchers and policymakers because it can influence consumer behavior. However, a clear picture of how this phenomenon impacts consumers has proven to be elusive. Using an integrated framework, this paper aims to derive hypotheses from theoretical concepts of materialism and consumer decision-making styles and uses a survey of 1,216 respondents in India to test the hypotheses. Design/methodology/approach The present study is the first of its kind to test the impact of materialist values on consumer decision-making styles among a sample of 13-18 years old school children. The constructs are validated through a first- and second-order confirmatory factor analysis and an integrated second-order structural model is developed. Findings This study finds that materialism is a positive predictor of “recreation/ hedonistic”,; “confused by over-choice”; “brand consciousness”; “perfectionistic high-quality consciousness”; and “habitual brand loyal” style of consumers. Further, materialism has a negative impact on “price value consciousness” of consumers. These findings have important implications for theory and practice. Research limitations/implications This study is restricted to school children in the National Capital Region and hence cannot be generalized to the whole young population in India. Originality/value Conceptualizing both materialism and consumer decision-making styles as second-order constructs, this is a maiden study that examines the impact of materialistic values on the consumer decision-making styles of young consumers.

Particularities of the independent auditor's report on reliability of accounting (financial) statements for 2019: COVID-19 as qualitatively essential information (Part 1)

2020 ◽  
Vol 23 (6) ◽  
pp. 701-722
Author(s):  
O.I. Shvyreva ◽  
Z.I. Kruglyak ◽  
A.V. Petukh
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Economic Situation ◽  
Risk Disclosure ◽  
Essential Information ◽  
Logical Method ◽  
Annual Reporting ◽  
The Face ◽  
Key Aspects ◽  
The Impact

Subject. This article discusses the issues related to the practice of financial reporting in the face of uncertainties caused by the coronavirus contagion, as well as the specifics of the audit strategy and formation of an audit opinion on this reporting. Objectives. The article aims to identify the quality characteristics of financial reporting prepared in the context of the COVID-19 pandemic and justify the key aspects of assurance engagement completion in an extremely uncertain epidemiological and economic situation. Methods. For the study, we used an abstract-logical method, content analysis techniques, systematization, and classification. Results. Analyzing the impact of the extremely uncertain epidemiological and economic situation on financial statements, the article clarifies aspects of disclosure of events after the reporting date and threats to business continuity in the annual reporting of economic entities. The article identifies possible alternative procedures and algorithms to obtain proper evidence when it is insufficient in the face of the inability to meet certain audit standards requirements in a remote audit environment. The article defines the impact of COVID-19 risk disclosure on the structure of the audit report and opinion. Relevance. The results of the study can be used in the practical activities of economic entities that prepare financial statements in the face of significant uncertainty, as well as auditors and audit organizations.

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