nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2008‒04‒15
seven papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Concise aspects regarding the accounting treatment for property, plant and equipment in according with IAS 16 By Ecobici, N
  2. Are stewardship and valuation usefulness compatible or alternative objectives of financial accounting? By Joachim Gassen
  3. Managerial Risk Accounting and Control – A German perspective By Winter, Peter
  4. Fiscal and Accounting Aspects Concerning the Reverse Charge in the Context of Accession to the European Union By Ecobici, N
  5. Bank Accounting Standards in Mexico. A layman’s guide to changes 10 years after the 1995 bank crisis By Gustavo A. Del Angel; Stephen Haber; Aldo Musacchio
  6. The Financial Social Accounting Matrix for China, 2002, and Its Application to a Multiplier Analysis By Li, Jia
  7. Organizational Design and Control across Multiple Markets: The Case of Franchising in the Convenience Store Industry By Dennis Campbell; Srikant M. Datar; Tatiana Sandino

  1. By: Ecobici, N
    Abstract: The objective of this paper is to describe the accounting treatment for property, plant and equipment, in according with the IAS 16, including: timing of the recognition of assets, determination of asset carrying amounts using both the cost model and a reevaluation model, depreciation charges and impairment losses to be recognized in relation to these values.
    Keywords: IAS 16; accounting treatment
    JEL: M41
    Date: 2007–11–23
  2. By: Joachim Gassen
    Abstract: In their joint framework project, the FASB and the IASB recently proposed dropping stewardship as a separate objective of financial accounting, because the Boards view stewardship and valuation usefulness as compatible sub-objectives ranking under an overall objective of decision usefulness. This paper puts this conjecture to an empirical test. As it is widely agreed that asymmetric timely earnings increase the contractual efficiency of accounting information, I first test whether firms with more asymmetric timely earnings produce more valuation-useful financial accounting information. Second, I test whether firms with more influential non-equity stakeholders provide more valuation-useful financial accounting information. As non-equity stakeholders in general face higher transaction costs when diversifying unsystematic risk compared to equity stakeholders and as stewardship-related risks should be at least in part unsystematic, I expect the demand for stewardship-related accounting information to increase with the influence of non-equity stakeholders. Using a broad sample of U.S. firms and a set of firm-specific metrics for valuation usefulness based on short-window capital market reactions to quarterly earnings announcements, I document that the valuation usefulness of financial accounting information is consistently negatively related to its stewardshiporientation. I conclude from these analyses that valuation usefulness and stewardship are alternative objectives of financial accounting.
    Keywords: decision usefulness, valuation usefulness, stewardship, conservatism
    JEL: D82 G14 G34 M41
    Date: 2008–03
  3. By: Winter, Peter
    Abstract: Recent developments have sparked a renewed interest concerning risk related topics in nonfinancial companies. Risk management issues directly touch the domain of management accounting and control. In Germany, topics related to the support of corporate or enterprise risk management are commonly discussed under the label of “Risikocontrolling”, which will be translated as Managerial Risk Accounting and Control. However, the conceptual foundation of a risk oriented management accounting respectively managerial accounting for the purpose of decision-facilitation and decision-influence pertaining to risk management is neither well developed nor well diffused and integrated. Therefore, the development of special risk oriented management accounting instruments is considered necessary. The paper aims at giving an overview of the subject and development of “Risikocontrolling” in Germany as well as discussing the necessity and (measurement and behavioural) problems of managerial risk accounting. Finally, a proposal for the design of managerial risk accounting systems will be presented.
    Keywords: Controlling; Germany; Management Accounting; Risk; Risk Management; Risk Measurement
    JEL: M41
    Date: 2007–08–21
  4. By: Ecobici, N
    Abstract: As from 1 January 2007 the European Directives are transposed into the national legislation and the European Regulations are truthfully applicable. In the VAT field, the European Directives, as well as the Jurisprudence of the European Court of Justice were transposed into the Fiscal Code, Title VI. Since the accession date, the legislation in the VAT field is repealed and replaced with the legislation harmonized with the Community acquis. The elimination of customs barriers between the 27 Member States of the European Union brings news as concerns the application of the "reverse charge" procedure that is applied in Romania as from the year 2005 for residue transactions and transactions with ferrous and non-ferrous metal waste, with grounds or buildings or building parts or living animals among VAT payers. Thus, starting with1 January 2007, the reverse charge is binding and applicable to all intra-Community acquisitions. At the same time the reverse charge was also applied for imports until 15 April 2007. In this paper I shall present aspects concerning the history of reverse charge in our country, accounting of operations and advantages and disadvantages of application of this procedure in the context of accession to the European Union.
    Keywords: Reverse charge; VAT; intra Community acquisitions; Fiscal Code; and imports
    JEL: M41
    Date: 2007–10–26
  5. By: Gustavo A. Del Angel (Centro de Investigación y Docencia Económica, Carr. Mexico); Stephen Haber (Stanford University - Department of Political Science); Aldo Musacchio (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: After the 1995 crisis, the Mexican banking system experienced significant changes in bank accounting standards. Most of these changes took place between 1996 and 2001, and had a significant impact in the structure and interpretation of financial information of banks. This document explains the major changes on bank accounting, their purpose and structure, and discusses their impact on financial information reported by Mexican banks. It also provides the English equivalent of the major accounting terms used by Mexican banks. The main purpose of this document is to provide a standardized guide to better understand financial information produced before and after the crisis, within the current context of internationalization of Mexican banks' ownership.
    Date: 2008–04
  6. By: Li, Jia
    Abstract: This study aims to shed light on the linkage between real side and financial side of Chinese economy. Utilizing a financial social accounting matrix (F-SAM) for China, 2002, newly constructed for this purpose, the current study provides a consistent accounting system for Chinese economy. The F-SAM allows a close examination on the structural characteristics of Chinese economy from the perspective of flows of funds. The study goes further to multiplier analysis. The main findings are: first, real side and financial side of Chinese economy are intertwined with each other; secondly, the development of a modern financial system contributes to the growth of Chinese economy; thirdly, financial sector, in place of government, has come to play a central role in resource mobilization and allocation, although government maintains interventions through capital transfer to non-financial enterprises; fourthly, bank deposits and loans are single significant financial instruments in China’s resources mobilization and allocation processes.
    Keywords: financial social accounting matrix; China; multiplier analysis
    JEL: C63 C02 P34
    Date: 2008–03
  7. By: Dennis Campbell (Harvard Business School, Accounting and Management Unit); Srikant M. Datar (Harvard Business School, Accounting and Management Unit); Tatiana Sandino (University of California, Marshall School of Business)
    Abstract: Many companies operate units which are dispersed across different types of markets, and thus serve significantly diverging customer bases. Such market-type dispersion is likely to compromise the headquarters' ability to control its local managers' behavior and satisfy the divergent needs of different types of customers. In this paper we find evidence that market-type dispersion is an important determinant of delegation and the provision of incentives. Using a sample of convenience store chains, we show that market-type dispersion is related to the degree of franchising at the chain level as well as the probability of franchising a given store within a chain. Our results are robust to alternative definitions of market-type dispersion and to other determinants of franchising such as the stores' geographic distance from headquarters and geographic dispersion. Additional analyses also suggest that chains that do not franchise at all, may cope with market-type dispersion by decentralizing operations from headquarters to their stores, and, to a weaker extent, by providing higher variable pay to their store managers.
    Keywords: Control, Market Dispersion, Decentralization, Incentives, Franchising, Retailing
    JEL: D82 D86 L22 M41
    Date: 2008–04

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