Does Fair Value Accounting for Non-Financial Assets

Does Fair Value Accounting for Non-Financial Assets Pass the Market Test? Hans B. Christensen and Valeri V. Nikolaevï€ ª The University of Chicago Booth School of Business 5807 South Woodlawn Avenue Chicago, IL 60637 Abstract: The choice between fair value and historical cost accounting is the subject of longstanding controversy among accounting academics and regulators. Nevertheless, the market based evidence on this subject is very limited. We study the choice of fair value versus historical cost accounting for non-financial assets in a setting where market forces rather than regulators determine the outcome. In general, we find a very limited use of fair value accounting. However, the observed variation is consistent with†¦show more content†¦Evidence from the US prior to 1940 is provided in Fabricant (1936) and ARB (1940). Evidence from Australia is provided in Whittred and Chan (1992), Brown et al. (1992), Easton et al. (1993), Cotter and Zimmer (1995), and Barth and Clinch (1996, 1998). Evidence from the UK is provided in Amir et al. (1993), Barth and Clinch (1996), Aboody et al. (1999), Muller (1999), and Danbolt and Rees (2008). 1 managers have stronger incentives to respond to market demands and commit to the accounting treatment that maximizes the value of the firm (i.e., is more efficient).2 We study valuation practices for arguably the most controversial (non-financial) asset groups: property, plant and equipment (PPE), investment property, and intangibles. Out of the twenty-nine European countries that mandated IFRS from 2005, we select the United Kingdom (UK) and Germany because they have the largest financial markets in Europe and are historically at opposite ends of the spectrum in terms of using fair value accounting under the local GAAP. Specifically, for non-financial assets, German GAAP allows only historical cost accounting, whereas UK GAAP either allows (for PPE) or mandates (for investment property) fair value accounting. As a result, IFRS expands the available valuation practices in both the UK and Germany. Indeed, under IFRS, both fair value and historical cost are allowed for PPE and investment property; and, if an activeShow MoreRelatedUniform accounting standards produce uniform financial reporting. Discuss and evaluate the above statement in the context of the International Financial Reporting Standards (IFRS)1064 Words   |  5 Pagesidentify what the phrases â€Å"accounting standards† and â€Å"financial reporting† refer to. Accounting standards refer to the accounting methods used in an accounting system like the IFRS. Financial reporting refers to the representation of financial information, in order to be uniform the financial reporting must be based on a fixed set of rules, invole complete objectivity and no bias. The IFRS (International financial reporting standards) has indeed helped the uniformity of financial reporting. However, inRead MoreRevaluation Assets1679 Words   |  7 PagesThere are still many differences in accounting treatment between International financial reporting standards (IFRS) and the U.S Generally Accepted Accounting Principles (GAAP). While IFRS are widely used by many countries around the world, FASB of the U.S still working on the intention of either adopt the IFRS or converge towards it. Until the convergence actually happens, there are still many critics about the accounting treatment at the same subject under U.S GAAP and IFRS. Example of this is theRead MoreAdvance Issues In Accounting1743 Words   |  7 PagesAdvance Issues In Accounting Introduction Accounting is the art of measuring and communicating financial information. To maintain uniformity and consistency in preparing and maintaining books of accounts, certain rules or principles have been evolved. These rules or principles are classified as concepts and conventions. One of the important concept in accounting is â€Å"Measurement† (Mattessich, 1977) The IASB Framework states: â€Å"Measurement is the process of determining the monetary amountsRead MoreEssay on Volkswagen Adopt IAS1158 Words   |  5 Pages[International Accounting and financial statement] Case 2 â€Å"Volkswagen Group† Questions and Answers 1. Based on the information provided in the chapter, describe the basic features of German accounting at the time Volkswagen adopted IAS. What development factors cause these features? APPUNTI DA FARE IAS compliant In 2001 first consolidated financial statement All mandatory requirements fulfilled IAS 12 and IAS 39 already fulfilled in 2000 financials Clear and fair view of net financial positionsRead MoreBusiness Combination1719 Words   |  7 PagesNeely ACC 401 – Advanced Accounting October 24, 2013 Abstract In this paper, I will provide an explanation for the business combination method I selected in expanding the corporation by acquiring another firm, the reason for selecting that business combination method, and how the purchase will grow the business. I will also analyze the accounting requirements for the business combination method I selected and how I determined goodwill was impaired and the financial impact of such impaired goodwillRead MoreThe Value Of Fair Value938 Words   |  4 PagesThe fair value option allow all entities to select and measure eligible items at a fair value at a specified date. The decision involved in whether to elect the fair value option have following conditions. The conditions include that it could be applied instrument by instrument, could be irrevocable which means it cannot be changed and the last condition is applying only to instrument and not to only specified risks, specific cash flows, or portions of that instrument. The fair value option all owsRead MoreIFRS Vs US GAAp1484 Words   |  6 Pagessets of accounting standards that are used worldwide. One is the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). There is a huge desire for there to one set of accounting standards worldwide with the increase of companies performing business in many different countries and global expansion. The International Financial Reporting Standards are issued by the International Accounting Standards Board. 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Regardless of such difficulties, due to the undeniable meaning of Accounting practices and the enormity of transactions involved on a daily basis, it is of great importanceRead MoreBusiness Combinations Essay1674 Words   |  7 Pageshave implemented the newly created accounting treatment called the â€Å"acquisition method.†    The major changes in the acquisition method involve variations to fair value measuremen t, goodwill recognition, and non-controlling interests.         Under this method, the parent company reported the net assets of the acquired company at the price that it was paid for.    This price included any cash  payment, the fair market value of any shares issued, and the present value of any promises to pay cash in theRead MoreFASB Codification Project1378 Words   |  6 Pagesï » ¿Intermediate Accounting Research Assignment Questions Directions: Type your answer starting on the line after each question. 1. FASB Accounting Standards Codification FASC a. When did the FASC Codification become effective? According to the Notice to Constituents (v4.7), the FASC Codification was released on July 1, 2009 and became effective for interim and annual periods ending after September 15, 2009. b. Did the FASC change prior GAAP? According to the Notice to Constituents (v4.7), the

The Field Of Interior Architecture - 1840 Words

Behind Interior Architecture In the field of Interior Architecture, to be pronounced successful conveys as one would always acquire highly budgeted projects. How you can cope up with increasing demands from client s anticipations, to place ideas in life from their perspective, and to what needs to be done to serve both present and future users of your design. Integrity, evolve, respect, are three core values I believe is behind the success of Interior Architecture. Three core values; what it can do to IA? To go into detail of each, it will stipulate a better discernment of why it is compulsory in the first place. Firstly, integrity is an unconditional compliance with a known code of practice on morally distinctive principles as part†¦show more content†¦By doing this, suitable solutions can be given rather of a quick fix and could later turn into a major disaster. Secondly, evolve is when you have the ability to adjust based on the given situation, typically for enhancement (Merriam-Webster. 2005). In some cases, tasks given to you are beyond your knowledge and capabilities, at times it might be in contradiction to your opinions. To evolve into something t you are not as being expected to perform given tasks is quite a common instance. This is, to put yourself in someone else s shoes as the elders would say for you to understand them. Relentless learning and exploration will coerce you to sustain with interminable possibilities. Interior Architecture achieves, by eradicating work and knowledge boundaries; they attempt beyond what every person has expected. Thirdly, respect is a portion of the business ethics each should exercise. It starts within the organisation extending it to the suppliers and furthermost of all to clients. This is when you set boundaries; distinguish when to push and when to pull back. People contemplate contrariwise, therefore we must respect everyone’s dissimilarities. Every development differs from one another, and it is regarded exchanging viewpoints. What lies behind every successful endeavour is various opinions from numerous people,

The Practice Of English Teaching - 1625 Words

Approaches and methods are the main methodology in the practice of English teaching. An approach refers to theories of the language, whereas a method includes the techniques and procedures in how it is used (Harmer, n.d.). Language teaching and its approaches have a very long history emerging from the early twentieth century. Throughout this time applied linguistics, teachers and others, thrived to develop teaching methods in order to meet the characteristics of change and improve efficiency. The main incentive for change corresponds to the increase demand in speakers who wish to acquire a second language together with globalization, encouraging an ongoing need of reassessing language-teaching practices (Richards and Rodgers, 1989). Due to the ongoing changes of language teaching, it is clear that this has resulted in a variety of approaches and methods that exist, ranging from the twentieth century to current time today. 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Writings About Dislikes and Likes free essay sample

Another word is involvement; it suggests that one’s emotions become almost enfolded in the characters, problems, and outcomes of a work. But sometimes these two words are used defensively, much like the word â€Å"boring. It is easy to say that it was â€Å"interesting† or you were â€Å"involved,† but you might be saying these things hoping that no one will ask you to explain why. In this case, you are being asked to explain your reasons. Using Your Early Reading Response Notes No one, not even your English teacher, can tell you what you should or should not like. While your experience of reading is still fresh, you should refer back to your reading notes (from assignment two). Build on to these notes if necessary and discuss whether or not you liked what you read. Be frank in your judgement. Write down your likes and dislikes and try to explain the reasons for your response, even if they are brief and incomplete. Example: I like â€Å"The Necklace† because of the surprise ending. It isn’t that I like the Mathilde’s bad luck, but I like the way that the author, Maupassant, hides the most important fact in the story until the end. Mathilde does all that work and sacrifice for no reason at all, and the surprise ending makes this point really well. This little paragraph could be expanded as a part of a developing essay. It is a clear statement of liking, followed by references to liable things in the story. This response pattern can be simply paraphrased as â€Å"I like [or dislike] this story because†¦Ã¢â‚¬  and is useful in writing an initial response in your notebook. Brainstorming Likes and Dislikes If at first you cannot write any full sentences detailing the causes of your responses, make a list of the things you like or dislike. If you write nothing, you are likely to forget your first reactions; recovering these for later, either for writing or discussion, will be difficult. Responding Favourably Usually you can equate your interest in a work with liking it. Use the following list to help you be more specific when trying to articulate a favourable response: You like and admire the characters and what they do and stand for You learn something new – something you had never known or thought before You gain new insights into things you already knew You learn about people and customs of different places, times, and ways of life You get interested and involved in the outcome of the action or ideas and do not want to put down the work until you have finished it You feel happy or feel good for having read the work You are amused and laugh often as you read You like the way the author has presented their ideas You find that some of the ideas are beautiful and worth remembering Responding Unfavourably Although dismissing a story as â€Å"boring† is not usually an ideal response, it can be used to formulate a response that has been carefully constructed. You do not need to hide the fact that you did not like something. Example s: 1. I do not like â€Å"The Necklace† because the main character seems spoiled, and I don’t think she is worth reading about. 2. The Necklace† was boring to be because it is not an adventure story, and I only really enjoy adventure stories. These are both legitimate responses because they are based on some specific aspects of the story. The Example 1 stems from a distaste of the main character’s unlikable traits; Example 2, from a preference for stories that move quickly and evoke interest in the dangers faced and overcome by main characters. What is important is that you include reasons for your dislike, and support those reasons using details from the story. Example 1: I do not like â€Å"The Necklace† because the main character seems spoiled, and I don’t think she is worth reading about. She is a phoney. She nags her husband because he is not rich. She never tells the truth. I dislike her for hurrying away from the party because she is afraid of being seen in her shabby coat. She is foolish and dishonest for not telling her friend about losing the necklace. It is true that she works hard to pay the debt, but she also puts her husband through ten years of hardship. If Mathilde had faced facts, she might have had a better like. I do not like her and cannot like the story because of her. Example 2: Before you can discuss what you don’t like, you must first articulate what you do like and why. Here are some reasons for liking adventure: 1. Adventure has fast action. 2. Adventure has danger and tension, and therefore interest. 3. Adventure has daring, active, and successful characters. 4. Adventure has obstacles which the characters work hard to overcome. If you were to simply say that that you did not like this story because of qualities it does not possess and left it at that, you would not have enough information to write an essay. Therefore you must try to â€Å"bridge the gap† by extending your preferences. For example, the story â€Å"The Necklace† definitely does not meet the criteria of the first three qualities of adventure stories, but a connection can be made to the fourth by saying that the main character works hard to overcome the conflict and hardship in the story. The trick is to show an open-minded approach and be willing to form a positive connection to the text being considered, even if reluctantly. I usually only like adventure stories; therefore, I disliked â€Å"The Necklace† at first because it is not an adventure story. But one of my reasons for liking adventure is that the characters work hard to overcome obstacles and hardships, liking finding buried treasure or exploring new places. Mathilde, the main character in Maupassant’s â€Å"The Necklace,† also works hard to overcome an obstacle. Insert details from the story] I see many of the same qualities in Mathilde that I see in adventure characters, and came to appreciate this character and her determination. Writing about Responses: Likes and Dislikes In writing about your responses, you should rely on your initial informed reactions. It is not easy to reconstruct your first responses after a lapse of time, so you will need your Early Reading Reponses observation s as a guide in the pre-writing stage. Develop your essay by stressing what interests you (or does not interest you) in the work. Introduction Begin by describing briefly the conditions that influence your response. Your central idea should be why you like or dislike the work. Be sure to mention the name of the story and its author. The thesis sentence should list the major causes of your response, which are to be developed in the body paragraph(s). Body The most common approach is to consider specific things about the work that you like or dislike. The list given on this handout may help you to articulate your responses. Give just enough (relevant) details from the story that someone who has not read the text will be able to understand your point. Use paragraphs as appropriate for your content. Conclusion Here you might summarize the reasons for your major response. Yu might also face any issues brought up by a change or modification of your first reactions. For example, if you have always held certain assumptions about your taste but like the work despite these assumptions, you may wish to talk about your own change or development. This topic is personal, but in an essay about likes and dislikes, discovery about yourself is something you should aim for. Assignment Write a short essay (3-5 paragraphs) examining the reasons that you like or dislike the story you are reading. While a reflective personal essay (therefore using â€Å"I† or â€Å"my†), this essay should be written using an academic and analytic approach. Since no time will be given for multiple drafts, this essay will be marked on content and organization only.