93–118 Did Fair-Value Accounting Contribute 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
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------------------------------------------------- Supply and demand The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product. Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary
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e-mail: skedia@hbs.edu. This paper combines the results of two earlier papers: “Does performance-based compensation explain restatements” by Natasha Burns and “Do Executive Stock Options Generate Incentives for Earnings Management? Evidence from Accounting Restatements” by Simi Kedia. We thank Jean Helwege, Andrew Karolyi, and René Stulz for their comments and advice. We also thank Jim Hsieh, Kose John, Steven Kaplan, Kevin Murphy, Prabhala, Jeremy Stein, Christof Stahel, Ralph Walking, Karen Wruck
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Abstract There are many issues surrounding fair value accounting, this assignment concerns about the discussion of fair value measurement under both the International Accounting Standard Board (IASB) and US national standard-setter, the Financial Accounting Standards Accounting (FASB). So far, IASB and FASB have created a uniform framework for how to measure fair value for entities around the world. By publishing IFRS 13 Fair Value Measurement, the IASB established a single source of guidance under
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University of Sfax, Tunisia. A B S T R A C T This paper empirically tests whether the low contemporaneous returns-earnings association set by previous empirical researches may be explained by lack of timeliness of accounting numbers. It hypothesises that if the criteria for accounting recognition yield a multi-period lag in earnings recognitions of economic events and if these events affect an informed market immediately when they occur, then future periods’ earnings would have explanatory for current
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Fair Value Accounting and Ethics Presented by: Unit 6: AC504 04.12.2011 Executive Summary Over the past 15 years fair value accounting has been building in popularity. It is now widely used by International Financial Reporting Standards (IFRS) and US GAAP. It is thought that adapting to fair value accounting will make financial statements more relevant and reliable. Currently the majority of assets are recorded under historical cost. Under historical cost the asset is recorded
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CHAPTER 1 Managerial Accounting in the Information Age Summary of Questions by Objectives and Bloom’s Taxonomy |Item | |1. | |49.
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Katherine Schipper, Financial Accounting Standards Board The views expressed in this presentation are my own, and do not represent positions of the Financial Accounting Standards Board. Positions of the Financial Accounting Standards Board are arrived at only after extensive due process and deliberation. 2. Overview Financial reporting topics Exposure draft, Business Combinations (joint with the IASB) Exposure draft, Consolidated Financial Statements, Including Accounting and Reporting of Noncontrolling
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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
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FINANCIAL PERFORMANCE MEASURES AND THEIR EFFECTS By Evanti Firstadea (105020307121003) Rosyida Mardyana (105020307121011) University of Brawijaya Economics and Business Faculty Accounting Major FINANCIAL PERFORMANCE MEASURES AND THEIR EFFECTS INTRODUCTION The primary objective of for-profit organizations is to maximize shareholder (or owner) value, or firm value for short. Thus, the results-control ideal would be to reward each individual employee for doing what s/he does to increase
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