Fair Value S Affect On Accounting S Ability To Predict Future Cash Flows
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Fair Value S Affect On Accounting S Ability To Predict Future Cash Flows
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Author : Keji Chen
language : en
Publisher:
Release Date : 2007
Fair Value S Affect On Accounting S Ability To Predict Future Cash Flows written by Keji Chen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
As the FASB implements accounting standards with fair value accounting components, discussions have centered around relevance and reliability of the reported values. Discussions primarily focus on potentially increased relevance weighed against issues of reliability rather than considering the potential impact on the predictive objective of accounting. The current study instead frames the issue based on financial reporting objectives as stated in SFAC No. 1. We show that, even with recent standard's fair value requirements, correlations between current accounting numbers and current market data have not improved through time, nor have correlations between current accounting numbers and future cash flows improved. Most importantly, we find that correlations between market data (in essence, fair values) and future cash flows are significantly lower than correlations between current accounting and future cash flows. That is, achieving fair value accounting would reduce the predictive ability of financial reporting for future cash flows.
Financial Instruments
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Author : International Accounting Standards Committee
language : en
Publisher:
Release Date : 2000
Financial Instruments written by International Accounting Standards Committee and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with Accounting categories.
Accrual Accounting Cash Accounting And The Estimation Of Future Cash Flows
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Author : Aliasghar Mottaghi
language : en
Publisher:
Release Date : 2011
Accrual Accounting Cash Accounting And The Estimation Of Future Cash Flows written by Aliasghar Mottaghi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
This study investigates the predictive ability of current and past cash flows with respect to the estimation of future cash flow, and compares this predictive ability with that of current and past earnings. Future cash flow is estimated in this study on the basis of a model hierarchy that initially incorporates aggregated predictors and then their disaggregated components, with the objective of improving on conventional research design with respect to the problematic issues surrounding missing values in source databases, extreme values in the sampled data and variability in fiscal year length. In determining whether the disaggregation of earnings into cash flow, accruals and their components adds to the predictive ability of cash flow, the present thesis also documents out-of-sample accuracy tests for the UK based on initial in-sample estimations, with accruals being computed using both the information in the Statement of Cash Flows and the information that may be derived from Balance Sheet changes. Using the information in the Statement of Cash Flows, the results of the in-sample estimation indicate that, whilst there is no notable difference between the ability of cash flow and aggregate earnings to predict future cash flow, the disaggregation of earnings into cash flow and accruals improves the prediction. The out-of-sample accuracy tests confirm the standard result that this disaggregated earnings model is a better predictor of future cash flow. In contrast, this thesis shows that, when using information in the Balance Sheet, by way of changes from one period to the next, the results of both the in-sample estimation and the out-of-sample accuracy tests show that disaggregated earnings is unable to outperform aggregate earnings in predicting future cash flow. Nevertheless, when the total accrual is further disaggregated into its deferral and accrual components, in-sample estimation reveals additional improvement in predictive ability, using each of the two sources of information to compute total accruals (the Statement of Cash Flows and Balance Sheet changes), although this is less evident with the out-of-sample tests. Whilst further analysis indicates that disaggregation is more informative when the firm size is large, the magnitude of accruals is low and the firm reports a positive CFO and EBIT, the thesis shows that the ability of the estimation models to predict future cash flow differs across industries in the UK, and that the findings are generally sensitive to the effect of database choice, the fiscal year length, and the identification and treatment of unrecorded data.
International Perspectives On Accounting And Corporate Behavior
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Author : Kunio Ito
language : en
Publisher: Springer
Release Date : 2014-07-08
International Perspectives On Accounting And Corporate Behavior written by Kunio Ito and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-07-08 with Business & Economics categories.
Despite the globalization of accounting standards occurring through convergence to International Financial Reporting Standards, local accounting systems are deeply intertwined with each country’s unique institutions such as its corporate system, disclosure practices and enforcement mechanisms. First, this book empirically analyzes the effects of globalization and localization of accounting rules on corporate behavior such as earnings management, signaling, investment behavior and dividend payout policy. Second, the book unravels the economic consequences of disclosure based on the concept of self-disciplining enforcement such as management forecasts, environmental disclosures and risk disclosures by Japanese firms. This volume is a step forward in understanding the link between accounting and corporate behavior based on a new institutional accounting approach.
Fair Value Measurements
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Author : International Accounting Standards Board
language : en
Publisher:
Release Date : 2006
Fair Value Measurements written by International Accounting Standards Board and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Business & Economics categories.
Research Standard Setting And Global Financial Reporting
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Author : Mary E. Barth
language : en
Publisher: Now Publishers Inc
Release Date : 2007
Research Standard Setting And Global Financial Reporting written by Mary E. Barth and has been published by Now Publishers Inc this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Business & Economics categories.
Research, Standard Setting, and Global Financial Reporting aids researchers in conducting research relevant to global financial reporting issues, particularly those of interest to financial reporting standard setters. Research, Standard Setting, and Global Financial Reporting describes the relation between research and standard-setting issues; explains how a variety of research designs can be used to address questions motivated by standard-setting issues, including valuation research and event studies; offers examples of research addressing a specific global standard-setting issue - use of fair value in measuring accounting amounts; offers further opportunities for future research on specific standard-setting topics by providing motivating questions relating to the major topics on the agendas of the FASB and IASB; explains how the IASB aims to achieve its mission of developing a single set of high quality accounting standards that are accepted worldwide; summarizes extant evidence on the relative quality of accounting amounts across global standard-setting regimes and whether global financial reporting is achievable or even desirable. Research, Standard Setting, and Global Financial Reporting examines opportunities for future research on issues related to globalization of financial reporting by identifying motivating questions that are potentially avenues for future research.
The Effect Of Sfas No 142 On The Ability Of Goodwill Predicting Future Cash Flows
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Author : Cheol Lee
language : en
Publisher:
Release Date : 2007
The Effect Of Sfas No 142 On The Ability Of Goodwill Predicting Future Cash Flows written by Cheol Lee and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
This study investigates the effects of Statement of Financial Accounting Standard No. 142 (SFAS No. 142) on the ability of goodwill to predict future cash flows. SFAS No. 142 allows substantial unverified managerial discretion and leads to a significant magnitude of economic impact on financial statements, resulting in critical debates over the consequence of its adoption. I find that the ability of goodwill to predict future cash flows has improved since the FASB adopted SFAS No. 142. Further analysis documents that goodwill's explanatory power for future cash flows is enhanced in the partitioned sample with a high level of managerial discretion, but not in the sample with a low level of managerial discretion in the pre-SFAS No. 142 period. Overall, contrary to the position of critics of SFAS No. 142, results support the view taken by the FASB and proponents of SFAS No. 142: expanding managerial discretion with the adoption of SFAS No. 142 improves managers' ability to signal future cash flows and this positive effect is stronger than the offsetting the effect of opportunistic reporting.
Wiley Guide To Fair Value Under Ifrs
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Author : James P. Catty
language : en
Publisher: John Wiley & Sons
Release Date : 2010-04-09
Wiley Guide To Fair Value Under Ifrs written by James P. Catty and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-04-09 with Study Aids categories.
Your one indispensable guide to all the Fair Value requirements of IFRS Acomplete guide to the complex valuation requirements of IFRS, this book includes chapters on theoretical and practical applications, with extensive examples illustrating the required techniques for each application. Appropriate for anyone involved professionally with finance—managers, accountants, investors, bankers, instructors, and students—this guide draws on a stellar panel of expert contributors from fourteen countries who provide international coverage and insight into a diverse range of topics, including: Fair Value in implementing IFRS Market Approach Income Approach—Capitalization and Discounting Methods Economic and Industry Conditions Cost of Capital Financial Statement Analyses Impairment Testing Intellectual Property Rights (patents, copyrights, trademarks) Projecting Financial Statements Liabilities Customer Relationships Share-based Payment Plant and Equipment Guide to Fair Value Under IFRS is the first international valuation book of its kind. Fully compliant with the Certified Valuation Analyst curriculum, it provides detailed guidance as to how fair value is to be determined and fills numerous gaps in common understanding of IFRS requirements.
Relevant Financial Statements
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Author : Joshua Ronen
language : en
Publisher:
Release Date : 1978
Relevant Financial Statements written by Joshua Ronen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1978 with Business & Economics categories.
The Routledge Companion To Fair Value And Financial Reporting
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Author : Peter Walton
language : en
Publisher: Routledge
Release Date : 2012-08-21
The Routledge Companion To Fair Value And Financial Reporting written by Peter Walton and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-08-21 with Business & Economics categories.
Comprising contributions from a unique mixture of academics, standard setters and practitioners, and edited by an internationally recognized expert, this book, on a controversial and intensely debated topic, is the only definitive reference source available on the topics of fair value and financial reporting. Drawing chapters from a diverse range of contributors on different aspects of the subject together into one volume, it: examines the use of fair value in international financial reporting standards and the US standard SFAS 157 Fair Value Measurement, setting out the case for and against looks at fair value from a number of different theoretical perspectives, including possible future uses, alternative measurement paradigms and how it compares with other valuation models explores fair value accounting in practice, including audit, financial instruments, impairments, an investment banking perspective, approaches to fair value in Japan and the USA, and Enron’s use of fair value An outstanding resource, this volume is an indispensable reference that is deserving of a place on the bookshelves of both libraries and all those working in, studying, or researching the areas of international accounting, financial accounting and reporting.