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on Accounting |
| By: | stanley c. w. salvary (Canisius College) |
| Abstract: | This paper addresses a very profound question concerning financial accounting. Is financial accounting measurement. as represented by diverse valuation rules. hodgepodge or is it logically developed? Salvary [1985. p.28. Chap. IV] advances and provides a theoretical development of the concept of 'recoverable cost' as the measurement property observed in (underlying) financial accounting measurement. Sa/vary [1989, pp.50-51] maintains that 'recoverable cost' is the center of 'economic gravity' and demonstrates that this valuation is derivable from axioms advanced. This paper provides a rigorous proof that 'recoverable cost' is the observed measurement property underlying financial accounting measurement. This analysis draws upon: (a) the concept of recovery underlying the investment decision and (b) the distinction between decision theory and measurement theory. It establishes recoverable cost as the measurement property in financial accounting and leads to the conclusion that financial accounting measurement is logically developed. |
| Keywords: | measurement rules, capital budgeting, realizable value, lower of cost and market, capitalization, depreciation, decision theory, market simulation, asset specificity. |
| JEL: | A |
| Date: | 2005–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpgt:0501004&r=acc |
| By: | Parekh Sandeep |
| Abstract: | An increasing focus on improved disclosures has been the regulatory thrust of securities regulations since the great crash of 1929. India gave up the merit based system of a controller regulating the issue of securities in favour of the disclosure based regulatory philosophy in 1988. Since then an increasing focus on public disclosure has been a priority with SEBI, the Indian regulator. However, in an attempt to improve the quality of disclosure, a necessary waste product has developed – that of the quantity of disclosure. Today with new regulations being added by the legislature, SEBI and stock exchanges, we see an excessive duplication of disclosure particularly of listed companies. There are several areas where net disclosure of information can be maintained even while reducing the quantity of information brought out. This paper examines some areas which require reduction of information flow because the information is already out in the public domain. The paper advocates a transition to a company registration with greater emphasis on continuous disclosures and a relatively easy track for seasoned companies to raise capital without an extensive prospectus centered regulations. |
| Date: | 2005–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2005-01-04&r=acc |
| By: | Philip E. Strahan |
| Abstract: | We examine empirically how legal origin, creditor rights, property rights, legal formalism, and financial development affect the design of price and non-price terms of bank loans in almost 60 countries. Our results support the law and finance view that private contracts reflect differences in legal protection of creditors and the enforcement of contracts. Loans made to borrowers in countries where creditors can seize collateral in case of default are more likely to be secured, have longer maturity, and have lower interest rates. We also find evidence, however, that ?Coasian? bargaining can partially offset weak legal or institutional arrangements. For example, lenders mitigate risks associated with weak property rights and government corruption by securing loans with collateral and shortening maturity. Our results also suggest that the choice of loan ownership structure affects loan contract terms. |
| JEL: | K0 G2 O5 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11052&r=acc |
| By: | Adelina Gschwandtner; John R. Cable |
| Abstract: | Long run persistence in company profits is analyzed for 156 US companies over a fifty-year period using AR1 and structural time series tests. A statistically significant degree of consitstency is found between them in identifying firms persistently above or below the competitive norm. However, the structural time series method detects a higher overall incidence of persistence, with nearly 70% of firms classed as not having converged on Zero, compared with 46% under AR1 estimation. The recently proposed structural approach is seen as a useful additional tool in analysing earnings dynamics, in particular where are complex trends and other dynamic complexities. |
| JEL: | L12 C32 |
| Date: | 2004–07 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:0409&r=acc |
| By: | Adelina Gschwandtner |
| Abstract: | The present study analyzes and compares profit persistence in four different samples of US companies during the periods 1950-72, 1960-80, 1970-90 and 1980-99. While most of the previous studies perform profit persistence analysis on survivors only, the present setup allows for companies to enter and exit the analyzed sample, thus giving a more comprehensive depiction of the US economy during this half of the century. The results point towards an increase of competition after the opening of the US economy to international competition in the 60-80´s, nevertheless the speed seems to have decreased in the most recent period. Key determinants of profit persistence seem to be firm´s size, industry- and firm growth, and firm growth, and in the most recent period industry concentration, market share, and the company´s merger activity. |
| JEL: | L10 |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:0410&r=acc |