...Working Paper Series Serie 4 Societies and social change Paper No. 4.01 Labour Market Developments and Social Welfare Hermine Vidovic* * The Vienna Institute for International Economic Studies 2013 www.grincoh.eu This paper was funded under the FP7 project “Growth– Innovation – Competitiveness: Fostering Cohesion in Central and Eastern Europe (GRINCOH)” under the Programme SSH.2011.2.2-1: Addressing cohesion challenges in Central and Eastern Europe; Area 8.2.2 Regional, territorial and social cohesion. Project Nr. 290657 Hermine Vidovic vidovic@wiiw.ac.at Vienna Institute for International Economic Studies www.wiiw.ac.at Please cite as: Vidovic H., (2013), ’Labour Market Developments and Social Welfare’, GRINCOH Working Paper Series, Paper No. 4.01 Labour Market Developments and Social Welfare Abstract Employment and activity rates in the new EU Member States (NMS) declined significantly up to the early 2000s and started to increase along with strong GDP growth thereafter. Job losses following the outbreak of the economic and financial crisis varied substantially across countries and have not been offset yet. Overall, the low educated and the young people are very disadvantaged on the NMS labour markets. With the exception of Poland and Slovenia, non-standard types of employment are uncommon in the NMS, following the pattern of Southern EU countries. Employment protection legislation has been adjusted to ‘European standards’ in the ...
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...The Relevance of the Value Relevance Literature For Financial Accounting Standard Setting: Another View Mary E. Barth Graduate School of Business Stanford University William H. Beaver Graduate School of Business Stanford University Wayne R. Landsman Kenan-Flagler Business School University of North Carolina – Chapel Hill January 2001 We thank Dan Collins, Brian Rountree, participants at the 2000 Journal of Accounting & Economics conference, and the editors, S. P. Kothari, Tom Lys, and Jerry Zimmerman, for helpful comments and suggestions. We appreciate funding from the Financial Research Initiative, Graduate School of Business, Stanford University, and Center for Finance and Accounting Research at UNC-Chapel Hill, Stanford GSB Faculty Trust, and the Bank of America Research Fellowship. Corresponding author: William H. Beaver, Graduate School of Business, Stanford University, 518 Memorial Way, Stanford, CA 94305-5015, (650) 723-4409, fbeaver@leland.stanford.edu The Relevance of the Value Relevance Literature For Financial Accounting Standard Setting: Another View Abstract This paper explains that value relevance research assesses how well accounting amounts reflect information used by equity investors, and provides insights into questions of interest to standard setters. A primary focus of financial statements is equity investment. Other uses of financial statement information, such as contracting, do not diminish the importance of value relevance research...
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...The Institute of Chartered Accountants in Australia GAAP-based financial reporting: measurement of business performance charteredaccountants.com.au Professor Stephen Taylor, The University of New South Wales, Sydney, Australia The Institute of Chartered Accountants in Australia The Institute of Chartered Accountants in Australia (the Institute) is the professional body representing Chartered Accountants in Australia. Our reach extends to more than 53,000 of today and tomorrow’s business leaders, representing some 43,000 Chartered Accountants and 10,000 of Australia’s best accounting graduates who are currently enrolled in our world-class post-graduate program. Our members work in diverse roles across commerce and industry, academia, government, and public practice throughout Australia and in 107 countries around the world. We aim to lead the profession by delivering visionary thought leadership projects, setting the benchmark for the highest ethical, professional and educational standards and enhancing and promoting the Chartered Accountant brand. We also represent the interests of members to government, industry, academia and the general public by actively engaging our membership and local and international bodies on public policy, government legislation and regulatory issues. The Institute can leverage advantages for its members as a founding member of the Global Accounting Alliance (GAA), an international accounting coalition formed by the world’s premier accounting...
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...permission of the Financial Accounting Standards Board. CON5 Statement of Financial Accounting Concepts No. 5 Recognition and Measurement in Financial Statements of Business Enterprises STATUS Issued: December 1984 Affects: No other pronouncements Affected by: No other pronouncements HIGHLIGHTS [Best understood in context of full Statement] • This Statement sets forth recognition criteria and guidance on what information should be incorporated into financial statements and when. The Statement provides a basis for consideration of criteria and guidance by first addressing financial statements that should be presented and their contribution to financial reporting. It gives particular attention to statements of earnings and comprehensive income. The Statement also addresses certain measurement issues that are closely related to recognition. • Financial statements are a central feature of financial reporting—a principal means of communicating financial information to those outside an entity. Some useful information is better provided by financial statements and some is better provided, or can only be provided, by notes to financial statements, supplementary information, or other means of financial reporting. For items that meet criteria for recognition, disclosure by other means is not a substitute for recognition in financial statements. • Recognition is the process of formally...
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...which is a set of financial reports. – The document that reports financial information about an entity to decision makers. Personal Planning, education, expenses, loans and payments, income taxes all use this information system that is accounting, (Conrado T. Valix, 2007) Having been defined as such, it is governed by rules and regulations, ensuring that it will provide a quality financial report enabling its decision makers to create intelligent decisions, these rules and regulations are defined Conceptual Framework – the professional and regulatory framework accounting that are concepts used in the preparation and presentation of financial reports. It covers the Concepts of Capital and Capital Maintenance, the Objective of Financial Statements, the Qualitative Characteristics of the Financial reports , (focusing on the manner of the report’s presentation and content) – or the qualities or attributes that make the reports useful to the users, and the Elements of the Financial Reports itself, the definition, recognition and measurement of financial statements. (Elerie Aranas, 2011) The Qualitative Characteristics is one of the principles making up the conceptual framework of accounting, established to ensure the report’s quality. Given these concepts pertaining to a report’s content (Relevance and Reliability) – which is the primary...
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...THE ACCOUNTING REVIEW Vol. 79. No. 4 2004 pp. 967-1010 Costs of Equity and Earnings Attributes Jennifer Francis Duke University Ryan LaFond University of Wisconsin Per M. Olsson Duke University Katherine Schipper Financial Accounting Standards Board ABSTRACT: We examine the relation between the cost of equity capital and seven attributes of earnings: accrual quality, persistence, predictability, smoothness, value relevance, timeliness, and conservatism. We characterize the first four attributes as accounting-based because they are typically measured using accounting information only. We characterize the last three attributes as market-based because proxies for these constructs are typically based on relations between market data and accounting data. Based on theoretical models predicting a positive association between information quality and cost of equity, we test for and find that firms with the least favorable values of each attribute, considered individually, generally experience larger costs of equity than firms with the most favorable values. The largest cost of equity effects are observed for the accounting-based attributes, in particular, accrual quality. These findings are robust to controls for innate determinants of the earnings attributes (firm size, cash flow and sales volatility, incidence of loss, operating cycle, intangibles use/intensity, and capital intensity), as vi/ell as to alternative proxies for the cost of equity capital. W I. INTRODUCTION e...
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...Financial statements are the most visible products of a company’s financial reporting process. The financial reporting process is governed by accounting rules and standards, managerial incentives, and enforcement and monitoring mechanisms. It is important for a user of financial information to understand the financial reporting environment along with the accounting information presented in financial statements. In this chapter, the concepts underlying financial reporting are discussed with special emphasis on accounting rules. Next the purpose of financial reporting is discussed – its objectives and how these objectives determine both the quality of the accounting information and the principles that underlie the accounting rules. The relevance of accounting information for business analysis and valuation is also discussed and limitations of accounting information are identified. Last, accrual accounting is discussed including the strengths and limitation of accruals, and the implications of accruals for financial statement analysis. OUTLINE | | |Financial Reporting Environment | |Statutory Financial Reports | |Financial Statements...
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...ACCT 321 ADVANCE FINANCIAL REPORTING EXAM QUIZZES To purchase this visit here: http://www.activitymode.com/product/acct-321-advance-financial-reporting-exam-quizzes/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACCT 321 ADVANCE FINANCIAL REPORTING EXAM QUIZZES Which of the following is not a required component of financial statements prepared in accordance with generally accepted accounting principles? 1. Balance sheet. 2. Notes to financial statements. 3. Income statement. 4. President's letter to shareholders. When should an expenditure be recorded as an asset rather than an expense? 1. Always 2. If the amount is material. 3. When future benefit exists. 4. President's letter to shareholders Recognition of expense related to amortization of an intangible asset illustrates which principle of accounting? 1. Historical cost. 2. Expense recognition. 3. Full disclosure. 4. Revenue recognition. Allowing firms to estimate rather than physically count inventory at interim (quarterly) periods is an example of a 1. Trade-off between timeliness and verifiability. 2. Neutrality and consistency. 3. Verifiability and faithful representation. 4. Faithful representation and comparability. Which accounting assumption or principle is being violated if a company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's stock price? 1. Going concern. 2. Historical...
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...1 Financial Reporting Overview Chapter 1 is an overview chapter covering accounting users, financial reporting, GAAP, accounting organizations, the conceptual framework, accounting careers, and ethics. The topics are wide ranging and very heavy on the new terminology side of things. Although it is a good chapter for introductory purposes, the concepts and organizations covered are so extensive that it will make a good chapter to come back to later, or at the end of intermediate accounting, to review. In fact, many parts of the chapter will make more sense and come together in your mind better only after you have dealt with specific details and examples in later chapters. Focus mostly on the terminology at this point in time. Making sense of it all will be easier later on. The final section on accounting careers and ethics may make for some interesting reading, but don’t expect to be tested much on it. The conceptual framework will probably get the bulk of the examination questions, both for this class and for the CPA exam. As such, understanding Exhibit 1-5 in the textbook is very important. Learning Objectives Refer to the Review of Learning Objectives at the end of the chapter. It is crucial that this section of the chapter is second nature to you before you attempt the homework, a quiz, or exam. This important piece of the chapter serves as your CliffsNotes or “cheat sheet” to the basic concepts and principles that must be mastered. If after reading...
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...receivables W11 Loans to directors Cash and cash equivalents Total assets Equity and liabilities Equity attributable to owners of parent Share capital Retained earnings W5 Other components of equity W5 Non-controlling interest W7 520 256·32 9·5 ––––––––– 785·82 ––––––––– 148·88 ––––––––– 934·7 ––––––––– 140 39·4 ––––––––– 179·4 ––––––––– 217 92 ––––––––– 309 ––––––––– 488·4 ––––––––– 1,423·1 ––––––––– Non-current liabilities Long-term borrowings Deferred tax W10 Total non-current liabilities Current liabilities Trade and other payables W6 Current tax payable Total current liabilities Total liabilities Total equity and liabilities Working 1 Message Fair value of consideration for 80% interest Fair value of non-controlling interest Amount of identifiable net assets acquired Gain on bargain purchase Essentially the entries would be: DR CR CR CR Net identifiable assets Cash Gain on bargain purchase Equity – non-controlling interest $m 400 $m 300 86 ––––– 386 (400) ––––– (14) ––––– $m 300 14 86 –––– 400 –––– –––– 400 –––– 13 Working 2 Mixted 1 June 2008 (128 – 10) Contingent consideration Total consideration transferred Fair value of equity interest held before business combination Fair value of consideration Fair value of non-controlling interest Identifiable net assets Increase in value Deferred tax (176 – 166) x 30% Goodwill Working 3 Clarity The gain of 1 recorded...
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...and credit decisions. Provide information about enterprise resources, claims to those resources, and changes to them. Provide the liquidation value of a company. Provide information that is useful in assessing cash flow prospects. 2. (TCO A) The Financial Accounting Standards Board employs a "due process" system which (Points: 5) has all CPAs in the United States vote on a new Statement. enables interested parties to express their views on issues under consideration. identifies the accounting issues that are the most important. requires that all accountants receive a copy of financial standards. 3. (TCO A) The body that has the power to prescribe the accounting practices and standards to be employed by companies that fall under its jurisdiction is the (Points: 5) SEC AICPA IASB GASB 4. (TCO A) The cash method of accounting: (Points: 5) is used by most publicly-traded corporations for financial statement purposes. is not in accordance with the matching principle for most publicly-traded corporations. is often used on the income statement by large, publicly-held companies. All of the above is true. 5. (TCO A) Which of the following is an ingredient of relevance? (Points: 5) Verifiability Representational faithfulness Neutrality Timeliness 6. (TCO A) The characteristic that is...
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...Accounting Horizons Vol. 24, No. 3 2010 pp. 471–485 American Accounting Association DOI: 10.2308/acch.2010.24.3.471 COMMENTARY A Framework for Financial Reporting Standards: Issues and a Suggested Model American Accounting Association’s Financial Accounting Standards Committee (AAA FASC) James A. Ohlson, Stephen Penman, Robert Bloomfield, Theodore E. Christensen, Robert Colson, Karim Jamal, Stephen Moehrle, Gary Previts, Thomas Stober, Shyam Sunder, and Ross L. Watts SYNOPSIS: This paper addresses the issues that confront the FASB and IASB in developing a new conceptual framework document. First, we suggest characteristics that a conceptual framework ought to exhibit. Most of these suggestions are based on our critique of the existing framework and the FASB-IASB work in progress. Second, we present a model framework that exhibits these characteristics. We emphasize up front that this framework is quite explicit. It goes to the heart of what a framework document should do: it places specific restrictions on what constitutes admissible accounting standards. The purpose of our effort is to stimulate broad discussion of alternative approaches to foundational documents and to offer a specific example of such an alternative approach. Keywords: FASB; IASB; conceptual framework; accounting standards; financial reporting. JEL Classifications: M40. In 2008, the American Accounting Association’s Executive Committee asked the Financial Accounting Standards Committee...
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...The European Accounting Review 2002, 11:1, 119–151 Accounting and capital markets: a survey of the European evidence Pascal Dumontier ` Pierre Mendes-France University, Grenoble Bernard Raffournier University of Geneva ABSTRACT The relationship between accounting information and capital markets has been the subject of numerous studies, especially in the US. The purpose of this article is to examine the corresponding evidence in Europe. This review classi es the European literature into three groups: studies of the market reaction to newly released accounting information; studies of the long-term association between stock returns and accounting numbers; studies devoted to the use of accounting data by investors and to the impact of market pressure on accounting choices. The paper reviews and summarizes the main results related to each of these topics. It also addresses some methodological issues and provides suggestions for future research. 1. INTRODUCTION Since the pioneering work of Ball and Brown (1968), the relationship between accounting information and capital markets has attracted considerable attention, to the point that it is probably one of the most popular issues in the accounting literature. The interest for this subject is legitimate, given the generally accepted statement that accounting gures are aimed at providing investors with relevant information for their investment decisions. Even if accounting data are used in various contexts such as the contracting...
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...relevant data or information that is necessary to make sound decision for the firms. And the main objective of financial accounting is to prepare financial statements such as statement of financial position, income statement, statement of owner’s equity and statement of cash flow. The preparation must be guided by generally accepted accounting principles, “GAAP” in short, of the physical location. The statements are then used to tell the external users the performance of the firm (Eisen, 2003). And the primary need for financial accounting, or sometimes called financial accountancy, is to minimize the principal-agent problems in organizations. This is to be done by evaluating and monitoring agents’ (manager) production and presenting the performance to people who interest in. In addition, financial accounting serves a lot of important objectives. It aims to understand the operation of the business, assist better control over the cash, show essential figures, guarantee management of the assets and ascertain the financial position of the business. According to a statement available online, in order to make decision efficiently, relevance is one of the most important factors that accounting information must hold (Petravick, nd). Due to time and cost constraints, high level of relevance...
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...|FRAMEWORK | | |U.S. GAAP |IFRS |Similarities | |Purpose of Framework |The FASB framework resides lower in hierarchy. |Management is explicitly required to |Both the frameworks are similar in | | |Management is not required to prioritize it if no|prioritize the IASB framework if there is |their purpose to assist in developing| | |standard is available. |no standard or interpretation available. |and assisting standards. | |Objectives of |It provides different objectives for business |It gives one objective for different |Both frameworks have a broad focus to| |financial statement |entities versus non business entities. |business entities. |provide relevant information to a | | | | |wide range of users. | |Underlying assumptions|Although it recognizes, but not given much |Give importance to accrual and going | | | |prominence is given to accrual and going concern |concern basis...
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