Studies in Accounting and Finance: Contemporary Issues and Debates

Cover
Contents
Preface
About the Editors and Contributors
Chapter 1: The IFRS Revolution—Move Towards One Worldwide Language for Financial Reporting
	1.1 Introduction
	1.2 Rationale for a Single Set of Global Accounting Standards
	1.3 The IASB—An Overview
	1.4 IFRS—Form, Quality and Content
		1.4.1 The Conceptual Foundation of IASB Standards
		1.4.2 Mini IFRS
		1.4.3 First-time Adoption of IFRS
	1.5 Worldwide Adoption of IFRS
		1.5.1 Europe
		1.5.2 Asia
		1.5.3 Africa
		1.5.4 North America
		1.5.5 South America
		1.5.6 Australia
	1.6 Some Unfinished Business
	1.7 Conclusion
	Notes
	References
Chapter 2: Full Cost Accounting—A Stepping Stone for Corporate Sustainability Reporting
	2.1 Introduction
		2.1.1 Major Objectives of the Present Study
	2.2 Inadequacies of Traditional Accounting vis-à-vis Sustainable Development
	2.3 FCA as a Pre-requisite for Mainstream Sustainability Reporting Practice
	2.4 Traditional Versus Emerging Views of Full Cost Accounting
	2.5 Definition and Nature of FCA
		2.5.1 Fundamental Goal of FCA
	2.6 Business Case for FCA
	2.7 Approaches to Internalization of Externalities for FCA Implementation
	2.8 Appropriate Methodology for FCA Adoption
		2.8.1 Classic FCA Experiment at Ontario Hydro
	2.9 Conclusion
	References
Chapter 3: Intangible Assets—New Paradigm Initiatives
	3.1 Introduction
	3.2 Awareness for Intangible Assets
	3.3 Literature Review
		3.3.1 Research and Development
		3.3.2 Computer Technology
		3.3.3 Patents
		3.3.4 Human Resources
	3.4 Definition and Recognition of Intangible Assets
	3.5 Measurement and Valuation of Intangible Assets
		3.5.1 Intangible Assets Arising from a Business Combination Recognized in Accordance with IFRS 3 and IAS 38
		3.5.2 Valuations in Accordance with IAS 36, ‘Impairment of Assets’
	3.6 Accounting and Reporting of Intangible Assets
		3.6.1 IAS 38 Intangible Assets
		3.6.2 Acquisition as Part of a Business Combination
		3.6.3 Revaluing Intangible Assets
		3.6.4 Amortization and Impairment
	3.7 Conclusion
	References
Chapter 4: Accounting for Financial Instruments—A Commentary on the Contemporary Principles, Standards and Related Issues
	4.1 Introduction
	4.2 Evolution of Accounting Standards on Financial Instruments—A Chronicle
	4.3 Rules and Principles of the Prevailing Accounting Standards—An Overview and Search for Similarities and Differences between IASB Standards and FASB Standards
		4.3.1 Measurement Principles for Financial Instruments
		4.3.2 Treatment of Gains and Losses
		4.3.3 Treatment of Impairment Losses
		4.3.4 Hedge Accounting
	4.4 Controversial Issues on Prevailing Accounting Standards
	4.5 Reform Initiatives Taken by the Standard-setting Bodies
	4.6 Conclusion
	Notes
	References
Chapter 5: Corporate Governance and Corporate Reporting Practices—An Overview of the Conceptual Landscape
	5.1 Overview of Corporate Governance
	5.2 What is Corporate Governance?
	5.3 Benefits of Good Corporate Governance
	5.4 Evolution of Corporate Governance Practices—An Overview
	5.5 Synoptic View of the Genesis of Corporate Governance in India
	5.6 Corporate Governance and Corporate Reporting
	5.7 Conclusion
	References
	Web sites
Chapter 6: XBRL and Financial Reporting Taxonomy—A Revolution in Preparation, Communication and Analysis of Electronic Financial Reports
	6.1 Introduction
	6.2 Evolution of XBRL
	6.3 Concepts of Related Terminologies
		6.3.1 Taxonomy
		6.3.2 XBRL Instance Document
		6.3.3 Approved/Recognized Taxonomies
	6.4 Tools Used in XBRL Reports
		6.4.1 XBRL Composer
		6.4.2 XBRL Viewer
	6.5 Advantages of XBRL Reporting
	6.6 XBRL Adoption by Different Countries (Source: www.edgar-online.com)
		6.6.1 China and Japan—Ahead of USA
	6.7 Conclusion
	Appendix 6.2
	Web sites
Chapter 7: ESOP Valuation and Disclosures in India*
	7.1 Introduction
	7.2 ESOP Accounting
	7.3 ESOP Valuation
		7.3.1 Black–Scholes–Merton (BSM) Model
		7.3.2 Lattice Model
		7.3.3 Literature Review
	7.4 Regulatory Framework for ESOP Accounting in India
		7.4.1 Disclosure Requirements as per SEBI Guidelines
	7.5 Disclosure of Stock Option Value by Indian Companies
		7.5.1 Sample Selection and Survey Procedure
		7.5.2 Place of Disclosure
		7.5.3 Valuation Model
		7.5.4 Valuation Assumptions and Their Disclosure
		7.5.5 Use of Management Discretion on Valuation Inputs
		7.5.6 Disclosure of EPS
	7.6 Conclusion
	Notes
	References
Chapter 8: Transition from AS 14 to IFRS 3—The Roadmap to Accounting for Business Communications
	8.1 Introduction
	8.2 Provisions of AS 14: Accounting for Amalgamations
	8.3 Salient Features of IFRS 3—Business Combination and Its Comparison with AS 14
	8.4 Challenges Inflicted by IFRS 3
	8.5 Conclusion
	References
	Web sites
Chapter 9: Fair Value Accounting—A Discussion for Development of a Conceptual Framework
	9.1 Introduction
	9.2 Fair Value Recognition
	9.3 Developments on Fair Value Measurement and Application
		9.3.1 US GAAP
		9.3.2 International Financial Reporting Standards (IFRSs)
	9.4 Modification of Income Statement
	9.5 Problems with Fair Value Accounting
	9.6 Conclusion
	References
Chapter 10: IFRS for SMEs vs Full IFRSs—A Comparison of Form and Contents
	10.1 Introduction
	10.2 How SMEs are Defined?
		10.2.1 IASB Definition
		10.2.2 ICAI Definition of SMEs
	10.3 The Rationale for Having Two Sets of Standards—IFRSs and IFRS for SMEs
	10.4 Evolution of IFRS for SMEs—A Historical Perspective
	10.5 IFRS for SMEs—The Key Characteristics
	10.6 IFRS for SMEs IFRSs and Full IFRSs—Similarities and Differences
	10.7 Conclusion
	Appendix 10.1
	Notes
	References
	Web sites
Chapter 11: Obstacles to the Development of Optimal Accounting Standards—Accounting and Political Issues
	11.1 Relevance of Optimal Accounting Standards
	11.2 Uniform Accounting System and Government Involvement in Accounting Regulation
	11.3 Contrast Between Financial Reporting and Tax Accounting
	11.4 Problems in Achieving International Harmonization in Financial Reporting
	11.5 Factors That Affect Standard Setter’s Performance
		11.5.1 Ambiguity in Accounting Rules
		11.5.2 Latitude Given to Corporate Managers
		11.5.3 Wide Variety in Disclosure Requirement of the Related-party Transactions
		11.5.4 Irrationality of GAAP
		11.5.5 An Example of Dependence of the Standard Setter on Historical Values
	11.6 How Accounting Credibility May Suffer?
		11.6.1 Analysis of Conflicting Interests of Managers and Shareholders
		11.6.2 Voluntary Financial Reporting Arguments
		11.6.3 Mandatory Financial Reporting Arguments
		11.6.4 Public Good Concept of Accounting Data
		11.6.5 Issue of Survival of a Standard Setting Body
		11.6.6 Due Process in Determination of Accounting Rules
		11.6.7 Convergence of Interests of Regulated Parties and Regulator
	11.7 Complication from Reflexive Intervention by Capital Market in Standard Setting
		11.7.1 Market Association Test of Representational Faithfulness of Accounting Numbers
		11.7.2 Independent Impact of Relevant Financial Information on Security Prices
		11.7.3 Scope of Accounting Disclosure
		11.7.4 Power of Predictive Ability
		11.7.5 Capital Market Researches for Standard Setting
	Notes
	References
Chapter 12: The Philosophical Aspects of Accounting Ethics
	12.1 Ethical Theories and Accounting Ethics
	12.2 Applied Areas of Accounting Ethics
	12.3 Moral Behaviour of an Accountant
	12.4 Ethical Intuition of an Accountant
	12.5 Conclusion
	Appendix 12.1: Kohlberg's Classification of Moral Behaviour
	References
Chapter 13: A Note on Global Financial Crises (From an Indian Perspective)
	13.1 Introduction and Background
	13.2 Financial Crisis or Financial Meltdown—Definition
	13.3 Where Are We Now?
	13.4 How Does the Bursting of a Bubble Hurt?
	13.5 Curative Measures
	13.6 How Are We Doing Here, in India?
	13.7 Concluding Observations
	Notes
	References
Chapter 14: M–M Hypothesis of Dividend Irrelevance in the Backdrop of Taxation in India
	14.1 Introduction
	14.2 Modigliani and Miller (M–M) Hypothesis
		14.2.1 Assumptions
		14.2.2 Tax Non-existence Assumption of M–M
	14.3 World Scenario on Dividend Taxation
	14.4 History of Dividend Tax in India
	14.5 Testing of Validity of M–M
	14.6 Observations
	14.7 Conclusion
	References
	Web sites
Chapter 15: Performance of NGOs—A Study on Some Selected Districts in West Bengal
	15.1 Introduction
	15.2 Activities of NGOs in West Bengal
	15.3 Performance Evaluation Techniques
		15.3.1 Criteria for an Appropriate Performance Measurement Tool
		15.3.2 Application of the Balanced Scorecard
	15.4 Methodology
	15.5 Performance Evaluation of Selected NGOs
	15.6 Findings of the Study
	15.7 Conclusion
	References
	Web sites
Chapter 16: Personal Carbon Trading—A  Lifestyle-based Carbon Control Mechanism
	16.1 Introduction
		16.1.1 Global Warming
	16.2 Approaches to Mitigating Measures
		16.2.1 Carbon Tax
		16.2.2 Carbon Trading
		16.2.3 Kyoto Protocol
		16.2.4 European Union’s Emission Trading Scheme (EU ETS)
	16.3 Lifestyle-based Carbon Control
	16.4 Personal Carbon Trading
		16.4.1 Need for PCT
		16.4.2 Mechanism
		16.4.3 Practicalities
		16.4.4 Alternative Proposals
		16.4.5 Superiority of PCT over Other Similar Existing Schemes
		16.4.6 Major Debatable Issues
		16.4.7 Evaluation
	16.5 Conclusions
	Notes
	References
Chapter 17: GARCH Models—A Key to Capture Volatility of Financial Data
	17.1 Introduction
	17.2 Characteristics of Financial Data—A Discussion
		17.2.1 Heavy Tails
		17.2.2 Loss/Gain Asymmetry
		17.2.3 Skewness
		17.2.4 Aggregational Gaussianity
		17.2.5 Intermittency
		17.2.6 Volatility Clustering
		17.2.7 Conditional Heavy Tails
		17.2.8 Slow Decay of Autocorrelation in Absolute Returns
		17.2.9 Leverage Effect
		17.2.10 Volume–Volatility Correlation
		17.2.11 Dependence Properties of Returns
	17.3 Modelling Volatility Clustering and Non-linear Dependence
		17.3.1 Autoregressive Method (AR)
		17.3.2 ARMA
		17.3.3 ARCH
		17.3.4 GARCH (p, q)
		17.3.5 GARCH-M
		17.3.6 log-GARCH
		17.3.7 EGARCH (Exponential GARCH)
		17.3.8 IGARCH
		17.3.9 FIGARCH
		17.3.10 FIEGARCH (Fractionally Integrated EGARCH)
		17.3.11 NGARCH (Non-linear GARCH)
		17.3.12 AGARCH (Asymmetric GARCH)
		17.3.13 APARCH (Asymmetric Power ARCH)
		17.3.14 GJR-GARCH
		17.3.15 QGARCH (Quadratic GARCH)
		17.3.16 TS-GARCH (Taylor–Schwert GARCH)
		17.3.17 TGARCH (Threshold GARCH)
		17.3.18 STGARCH (Smooth Transition GARCH)
		17.3.19 STAR-GARCH (Smooth Transition Autoregressive GARCH)
		17.3.20 HGARCH (Hentschel GARCH)
		17.3.21 HYGARCH (Hyperbolic GARCH)
		17.3.22 ATGARCH (Asymmetric Threshold GARCH)
		17.3.23 GARCH-X
		17.3.24 CGARCH (Component GARCH)
		17.3.25 EVT-GARCH (Extreme Value Theory GARCH)
		17.3.26 GARCH-G/GARCH-Δ (GARCH Gamma/Delta)
		17.3.27 Structural GARCH
		17.3.28 F-ARCH/F-GARCH (Factor GARCH)
		17.3.29 AR (p)/ARCH (p)
	17.4 Multivariate GARCH
	17.5 Conclusion
	References
Index