...and changes in financial position of an entity that is useful to a wide range of users in making economic decisions. It also states “financial statements also show the results of stewardship of management, or accountability of management for the resources entrusted to it”. FVA is superior to historical cost accounting for these purposes. FVA is dominant in numerous IFRS’s and IAS’s. The IASB have yet to finalise an IFRS on fair value measurement, but it is expected it will have been completed by early 2011. Furthermore, the IASB is developing extra educational material to accompany the publication of the IFRS on fair value measurement. This material will give a description on the thought process for the measurement of assets, liabilities and equity instruments at fair value. The fair value measurement framework will be based upon the core principles that define fair value as an exit price “The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”. Another aim of this project is to improve disclosures about fair value...
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...Discussion questions and practical exercises: Word Count: 1002 Total pages: 7 Question A-1 The real owners of a company are its shareholders. The objective of maximising a firm’s market value to shareholders is achieved by increasing the price of existing ordinary shares. This market price reflects the value of the firm as seen by its owners. An accountant’s position within a corporation can have numerous responsibilities with equal importance. The majority of attention for an accountant is indeed conferred to the company’s balance sheets and profit and loss statements as these are vital in maintaining control over the company’s financial position; however accountants play a vital role in making key financial decisions that contribute to creating wealth for the shareholders. Methods such as budget forecasting and capital budgeting techniques are utilised and performed by accountants to determine which projects should be undertaken to maximise profits. They construct and provide the financial information necessary for directors to make an informed and calculated decision on where to invest the funds provided by shareholders. Companies have an endless life span and to simply focus on either short term or long term profits would be contrary to the interests of the company and its shareholders. Investors will react strongly to every investment and dividend decision by either increasing or decreasing the share price. A strong focus must therefore be given to every investment...
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...A practical guide to accounting for agricultural assets November 2009 PricewaterhouseCoopers’ IFRS and corporate governance publications and tools 2009 IFRS technical publications Manual of accounting – IFRS 2010 IFRS pocket guide 2009 Global guide to IFRS providing comprehensive practical guidance on how to prepare financial statements in accordance with IFRS. Includes hundreds of worked examples and extracts from company reports. The Manual is a three-volume set comprising: • Manual of accounting – IFRS 2010 • Manual of accounting – Financial instruments 2010 • Illustrative IFRS corporate consolidated financial statements for 2009 year ends Provides a summary of the IFRS recognition and measurement requirements. Including currencies, assets, liabilities, equity, income, expenses, business combinations and interim financial statements. IFRS news A practical guide to capitalisation of borrowing costs Monthly newsletter focusing on the business implications of the IASB’s proposals and new standards. Subscribe by emailing corporatereporting@uk.pwc.com. Guidance in question and answer format addressing the challenges of applying IAS 23R, including how to treat specific versus general borrowings, when to start capitalisation and whether the scope exemptions are mandatory or optional. Illustrative interim financial information for existing preparers A practical guide to new IFRSs for 2009 40-page guide providing high-level outline of the key requirements...
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...A practical guide to accounting for agricultural assets November 2009 PricewaterhouseCoopers’ IFRS and corporate governance publications and tools 2009 IFRS technical publications Manual of accounting – IFRS 2010 IFRS pocket guide 2009 Global guide to IFRS providing comprehensive practical guidance on how to prepare financial statements in accordance with IFRS. Includes hundreds of worked examples and extracts from company reports. The Manual is a three-volume set comprising: • Manual of accounting – IFRS 2010 • Manual of accounting – Financial instruments 2010 • Illustrative IFRS corporate consolidated financial statements for 2009 year ends Provides a summary of the IFRS recognition and measurement requirements. Including currencies, assets, liabilities, equity, income, expenses, business combinations and interim financial statements. IFRS news A practical guide to capitalisation of borrowing costs Monthly newsletter focusing on the business implications of the IASB’s proposals and new standards. Subscribe by emailing corporatereporting@uk.pwc.com. Guidance in question and answer format addressing the challenges of applying IAS 23R, including how to treat specific versus general borrowings, when to start capitalisation and whether the scope exemptions are mandatory or optional. Illustrative interim financial information for existing preparers A practical guide to new IFRSs for 2009 40-page guide providing high-level outline of the key requirements...
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...Financial Crisis? Christian Laux and Christian Leuz I n its pure form, fair-value accounting involves reporting assets and liabilities on the balance sheet at fair value and recognizing changes in fair value as gains and losses in the income statement. When market prices are used to determine fair value, fair-value accounting is also called mark-to-market accounting. Some critics argue that fair-value accounting exacerbated the severity of the 2008 financial crisis. The main allegations are that fair-value accounting contributes to excessive leverage in boom periods and leads to excessive write-downs in busts. The write-downs due to falling market prices deplete bank capital and set off a downward spiral, as banks are forced to sell assets at “fire sale” prices, which in turn can lead to contagion as prices from asset fire sales of one bank become relevant for other banks. These arguments are often taken at face value, but evidence on problems created by fair-value accounting is rarely provided. We discuss these arguments and examine descriptive and empirical evidence that sheds light on the role of fair-value accounting for U.S. banks in the crisis. While large losses can clearly cause problems for banks and other financial institutions, the relevant question for our article is whether reporting these losses under fair-value accounting created additional problems. Similarly, it is clear that determining fair values for illiquid assets in a crisis is very difficult...
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...to the Financial Crisis? Christian Laux and Christian Leuz I n its pure form, fair-value accounting involves reporting assets and liabilities on the balance sheet at fair value and recognizing changes in fair value as gains and losses in the income statement. When market prices are used to determine fair value, fair-value accounting is also called mark-to-market accounting. Some critics argue that fair-value accounting exacerbated the severity of the 2008 financial crisis. The main allegations are that fair-value accounting contributes to excessive leverage in boom periods and leads to excessive write-downs in busts. The write-downs due to falling market prices deplete bank capital and set off a downward spiral, as banks are forced to sell assets at “fire sale” prices, which in turn can lead to contagion as prices from asset fire sales of one bank become relevant for other banks. These arguments are often taken at face value, but evidence on problems created by fair-value accounting is rarely provided. We discuss these arguments and examine descriptive and empirical evidence that sheds light on the role of fair-value accounting for U.S. banks in the crisis. While large losses can clearly cause problems for banks and other financial institutions, the relevant question for our article is whether reporting these losses under fair-value accounting created additional problems. Similarly, it is clear that determining fair values for illiquid assets in a crisis is very difficult...
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...CORPORATE FINANCE T H IRD E DIT ION JONATHAN BERK STANFORD UNIVERSITY PETER D E MARZO STANFORD UNIVERSITY Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo To Rebecca, Natasha, and Hannah, for the love and for being there —J. B. To Kaui, Pono, Koa, and Kai, for all the love and laughter —P. D. Editor in Chief: Donna Battista Acquisitions Editor: Katie Rowland Executive Development Editor: Rebecca Ferris-Caruso Editorial Project Manager: Emily Biberger Managing Editor: Jeff Holcomb Senior Production Project Manager: Nancy Freihofer Senior Manufacturing Buyer: Carol Melville Cover Designer: Jonathan Boylan Cover Photo: Nikreates/Alamy Media Director: Susan Schoenberg Content Lead, MyFinanceLab: Miguel Leonarte Executive Media Producer: Melissa Honig Project Management and Text Design: Gillian Hall, The Aardvark Group Composition and Artwork: Laserwords Printer/Binder: R.R. Donnelley/Jefferson City Cover Printer: Lehigh Phoenix Text Font: Adobe Garamond Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text and on this copyright page. Credits: Cover: Sculpture in photo: Detail of Flamingo (1973), Alexander Calder. Installed in Federal Plaza, Chicago. Sheet metal and paint, 1615.4 x 1828.8 x 731...
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...CORPORATE FINANCE T H IRD E DIT ION JONATHAN BERK STANFORD UNIVERSITY PETER D E MARZO STANFORD UNIVERSITY Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo To Rebecca, Natasha, and Hannah, for the love and for being there —J. B. To Kaui, Pono, Koa, and Kai, for all the love and laughter —P. D. Editor in Chief: Donna Battista Acquisitions Editor: Katie Rowland Executive Development Editor: Rebecca Ferris-Caruso Editorial Project Manager: Emily Biberger Managing Editor: Jeff Holcomb Senior Production Project Manager: Nancy Freihofer Senior Manufacturing Buyer: Carol Melville Cover Designer: Jonathan Boylan Cover Photo: Nikreates/Alamy Media Director: Susan Schoenberg Content Lead, MyFinanceLab: Miguel Leonarte Executive Media Producer: Melissa Honig Project Management and Text Design: Gillian Hall, The Aardvark Group Composition and Artwork: Laserwords Printer/Binder: R.R. Donnelley/Jefferson City Cover Printer: Lehigh Phoenix Text Font: Adobe Garamond Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text and on this copyright page. Credits: Cover: Sculpture in photo: Detail of Flamingo (1973), Alexander Calder. Installed in Federal Plaza, Chicago. Sheet metal and paint, 1615.4 x 1828.8 x 731...
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...appointment Note that I am always willing to schedule additional office hours by appointment. I check email frequently, so that is also a good way to communicate. If I do not respond to your email message, that means I did not receive it. Please send it again. Email: butcher@ups.edu Required Course Materials Text: Madura, International Financial Management, Abridged 10th Edition, South-Western, 2011 Book: Lewis Michael, Boomerang: Travels in the New Third World, Norton, 2011 Calculator: A calculator is required. A financial calculator would be preferable, as it would have functions for bond valuation, net present valuation (NPV), internal rate of return (IRR), present value (PV), and future value (FV). A suitable calculator, the HP10-B, is available in the bookstore for about $30. Harvard Business School Cases https://cb.hbsp.harvard.edu/cbmp/access/17920074 The above is the URL for Harvard Business School so that you can obtain discounted student pricing for the cases: Group Ariel S.S.: Parity Conditions and Cross-Border Valuation (Note that there is no need to purchase the audio version of this case.) Pixonix Inc. Addressing Currency Exposure Recommended: 1. Subscription to the Wall Street Journal. Several class sessions will utilize information from the Wall Street Journal. See syllabus for the dates. 2. Subscription to or regular reading of the Financial...
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...School of Administrative Studies Faculty of Liberal & Professional Studies York University Winter 2015 Course Outline AP/ADMS 3585 3.0 Intermediate Accounting I Course Director : | Alla Volodina | | Section : | M | | Course website: | | | Date/Time: | Wednesday 7:00 pm to 10 pm | | Location : | ACE 009 | | Instructor Office Hours: | By appointment | E-Mail Address : | adms3585@yorku.ca | Calendar Description This course, in conjunction with AP/ADMS 3595 3.00, develops thorough knowledge and understanding of generally accepted accounting principles and financial statement analytical skills by examining various technical areas of financial accounting. Prerequisite: AP/ADMS 2500 3.00. Prior to Fall 2009 Prerequisite: AK/ADMS 2500 3.0. Course credit exclusion: AK/ADMS 3585 3.00. Learning Outcomes After completion of the course, apart from mastering the technical knowledge of the revenue and asset side of the financial statements, students should also 1. Understand the importance of ethics in the accounting profession and realize potential conflicts of interest that one may encounter in the profession. 2. Begin to learn how to see the inter-relationship between accounting issues, analyse them, and integrate the findings to draw reasonable conclusions. 3. Begin to learn the basics of case writing and communicate effectively. 4. Understand the importance of teamwork and learn how to develop work plans and resolve conflicts. The...
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...*IS1347* //integrafs1/cengage/3-Pagination/Cengage_US/Business_and_Economics/FFM13e/3B2/brigham_endpaper.3d, 11/16/11, 17:35, page: 1 FREQUENTLY USED SYMBOLS/ABBREVIATIONS ACP Average collection period ADR American depository receipt AFN Additional funds needed AMT Alternative minimum tax APR b Annual percentage rate Beta coefficient, a measure of an asset’s riskiness bL Levered beta bU Unlevered beta BEP BVPS CAPEX CAPM CCC Basic earning power Book value per share Capital expenditures Capital Asset Pricing Model Cash conversion cycle CF Cash flow; CFt is the cash flow in Period t CR Conversion ratio CV Coefficient of variation Dp Dividend of preferred stock Dt Dividend in Period t DCF Discounted cash flow D/E Debt-to-equity ratio DEP Depreciation D1/P0 DPS DRIP Expected dividend yield Dividends per share Dividend reinvestment plan DRP Default risk premium DSO Days sales outstanding e Approximately equal to 2.7183 EAA Equivalent annual annuity EAR Effective annual rate, EFF% EBIT EBITDA EPS EVA F Earnings before interest and taxes; operating income Earnings before interest, taxes, depreciation, and amortization Earnings per share Economic value added (1) Fixed operating costs (2) Flotation cost FCF Free cash flow FVN Future value for Year N FVAN g GAAP HVN I IFRS IPER I/YR INT IP IPO IRR LIBOR ...
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...TABLE OF CONTENTS 1. INTRODUCTION………………………………………………………………………………………………..3 2. CHAPTER 1 --- What is the Business Combination --- ………………………………….……4 3.1. Accounting For Business Combination General Approach…………………………………………………………………………………………………..5 3.2. Accounting For Business Combination Calculate………………………….………6-7 3. CHAPTER 2 --- What is the Business Merger and Acquisition ---……………………………8 3.1. Types of Merger………………………………………………………………………………………..9 3.2. Purpose of Merger and Acquisition……………………………………………………..9-10 3.3. The Process of Merger and Acquisition with Reference to an Organization…………………………………….………………………………………………………………...10 3.4. Stage of Integration……………………………………...………..…..11-12-13 4. CHAPTER 3 --- What is the Business Consolidation…….…..…………………………………..14 4.1. Significance of Consolidation……….…………………...…………………………………….14 4.2. Function of Consolidation…………….………………………………………………………….14 4.3. Effects of Consolidation…….…………………………………………………………………….15 5. CHAPTER 4 --- What is the Business Goodwill…………………….……………………………….15 5.1. What Creates Business Goodwill……………………………….……………………….……15 5.2. Types of Business Goodwill……………………………………………….……………….……16 5.3. Accounting View of Business Goodwill…………………………………………….….….16 5.4. Economic View of Business Goodwill……………………………………………….….….16 5.5. How Business Goodwill is Determined…………………..……………………….….17-18 5.6. How Do You Calculate Goodwill in Accounting?............................18-19-20 ...
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...The Role of Accounting in the Financial Crisis: Lessons for the Future S.P. Kothari kothari@mit.edu 617-253-0994 and Rebecca Lester rlester@mit.edu MIT Sloan School of Management E60-382, 30 Memorial Drive Cambridge, MA 02421 December 14, 2011 ABSTRACT: The advent of the Great Recession in 2008 was the culmination of a perfect storm of lax regulation, a growing housing bubble, rising popularity of derivatives instruments, and questionable banking practices. In addition to these causes, management incentives, as well as certain US accounting standards, contributed to the financial crisis. We outline the significant effects of these incentive structures, and the role of fair value accounting standards during the crisis, and discuss implications and relevance of these rules to practitioners, standard-setters, and academics. This article is based on a presentation by Deputy Dean and Professor SP Kothari of the Sloan School of Management, Massachusetts Institute of Technology, at Baruch College on October 25, 2010. 1 Electronic copy available at: http://ssrn.com/abstract=1972354 The Role of Accounting in the Financial Crisis: Lessons for the Future I. Introduction The Great Recession that started in 2008 has had significant effects on the US and global economy; estimates of the amount of US wealth lost are approximately $14 trillion (Luhby 2009). Various causes of the financial crisis have been cited, including lax regulation over mortgage lending,...
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...International Financial Management Copeland/Weston/Shastri Financial Theory and Corporate Policy Cox/Rubinstein Options Markets Dietrich Financial Services and Financial Institutions: Value Creation in Theory and Practice Dorfman Introduction to Risk Management and Insurance Dufey/Giddy Cases in International Finance Eakins Finance in .learn Eiteman/Stonehill/Moffett Multinational Business Finance Emery/Finnerty/Stowe Corporate Financial Management Fabozzi Bond Markets: Analysis and Strategies Fabozzi/Modigliani Capital Markets: Institutions and Instruments Fabozzi/Modigliani/Jones/Ferri Foundations of Financial Markets and Institutions Finkler Financial Management for Public, Health, and Not-for-Profit Organizations Francis/Ibbotson Investments: A Global Perspective Fraser/Ormiston Understanding Financial Statements Geisst Investment Banking in the Financial System Gitman Principles of Managerial Finance* Gitman Principles of...
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...CURRICULUM OF BUSINESS ADMINISTRATION FOR BBA, BBS, MBA & MS HIG HER EDUC ATIO N CO MM ISSION (2012) HIGHER EDUCATION COMMISSION ISLAMABAD 1 CURRICULUM DIVISION, HEC Prof. Dr. Syed Sohail H. Naqvi Mr. Muhammad Javed Khan Malik Arshad Mahmood Dr. M. Tahir Ali Shah Mr. Farrukh Raza Mr. Abdul Fatah Bhatti Executive Director Adviser (Academics) Director (Curri) Deputy Director (Curri) Asstt. Director (Curri) Asstt. Director (Curri) Composed by: Mr. Zulfiqar Ali, HEC, Islamabad 2 CONTENTS 1. Introduction……………………………………...........6 2. BBA Programme....................................................11 a. Structure of BBA Programme..……………....12 b. Layout for BBA Programme..........................13 c. Semester-wise Breakup for BBA…...............14 3. Bachelor of Business Studies (BBS)......................15 4. MBA Programme....................................................16 a. Structure of MBA Programme........................17 b. Semester-wise Breakup for MBA...................19 5. MS in Management Sciences................................20 a. Structure of MS Programme...........................20 b. Eligibility for Non-business Degree Holders...21 6. Roadmap for Business Education…………............24 7. BBA Course outlines...............................................25 a. Compulsory Courses for BBA...…….…..........25 b. Foundation Core Courses...........…....…....... 41 c. Major Core Courses........................................59 d. Major...
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