On theoretical engorgement and the myth of fair value accounting in China: a reply

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kathryn Bewley ◽  
Cameron Graham ◽  
Songlan Peng
Keyword(s):  
Accounting Standards ◽  
Movement Analysis ◽  
Fair Value ◽  
Research Approach ◽  
Fair Value Accounting ◽  
Political Factors ◽  
Content Type ◽  
Accounting Research

PurposeThis article is a reply to “On theoretical engorgement and the myth of fair value accounting in China” Nobes (2019) from the authors of “Adaptability to fair value accounting in an emerging economy: A case study of China's IRFS convergence” (Peng and Bewley, 2010) and “The Winding Road to Fair Value Accounting in China: A Social Movement Analysis” (Bewley et al., 2018).Design/methodology/approachThis article engages directly with the arguments of the criticism.FindingsThis article argues that the author of the commentary misunderstands the purpose, content and findings of both papers. By providing only a narrowly focused technical analysis of the new Chinese accounting standards, the author fails to see that their qualitative research approach reveals important, complex social and political factors at play in China's attempts to adopt modern international accounting principles. The commentary expresses a view that accounting is a neutral technology that needs only to be clearly defined and enumerated to be correctly implemented, whereas this research takes a much broader and deeper perspective. The authors seek to understand how China was able to successfully adopt fair value accounting standards in 2006, whereas an earlier attempt to introduce fair value in 1998 had led to abuse of fair value measurements and the eventual repeal of fair value regulations in 2001.Practical implicationsThis article helps clarify the purpose of qualitative accounting research, the role of theory in such research and the usefulness of theory in describing and explaining empirical case facts related to changes in accounting standards, particularly in an international context.Originality/valueThis article contributes to a better appreciation of qualitative accounting research.

The localised accounting environment in the implementation of fair value accounting in Indonesia

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bernadia Linggar Yekti Nugraheni ◽  
Lorne Stewart Cummings ◽  
Alan Kilgore
Keyword(s):  
Emerging Economies ◽  
Accounting Standards ◽  
Fair Value ◽  
Successful Implementation ◽  
Fair Value Accounting ◽  
Structured Interviews ◽  
Content Type ◽  
Emerging Country ◽  
Government Involvement

Purpose This case study aims to investigate the role of actors in the implementation of fair value standards in an emerging country, Indonesia. Design/methodology/approach This study uses semi-structured interviews with important actors within the local accounting profession, standard setting and regulatory environment, to analyse fair value accounting implementation. This study also incorporates information from press releases and newspapers, to provide a more comprehensive picture of fair value implementation. Findings First, professionals undertake routine actions, cultivate interests and strategically navigate their environment during the process of fair value standard implementation. Second, the role of appraisers becomes more prominent during this process. Third, government involvement is significant in ensuring the successful implementation of global accounting standards. Research limitations/implications First, differing localised contexts, including communities and actors, may shape how an emerging country undertakes the diffusion and implementation of global standards, which in turn can also lead to institutional change. Second, government involvement is crucial in supporting the implementation of global accounting standards within emerging economies. Third, implementing market-based measurements within emerging economies characterised by a lack of an active and liquid market may present challenges. Practical implications Third, implementing market-based measurements within emerging economies characterised by a lack of an active and liquid market may present challenges. Originality/value This study applies the concept of Institutional Work within Institutional Theory to explain how fair value standards are implemented within a localised emerging economy characterised by unique actor roles and goal-directed action.

Lean Six Sigma in higher education institutes: an Irish case study

2019 ◽  
Vol 10 (4) ◽  
pp. 948-974 ◽  
Author(s):  
Seamus J. O’Reilly ◽  
Joe Healy ◽  
Tom Murphy ◽  
Rónán Ó’Dubhghaill
Keyword(s):  
Higher Education ◽  
Six Sigma ◽  
Single Case ◽  
Lean Six Sigma ◽  
Research Approach ◽  
Content Type ◽  
Training Programmes ◽  
The Impact

Purpose This paper aims to contribute to a developing literature on continuous improvement (CI), enabled by Lean Six Sigma (LSS), in higher education institutions (HEIs). It reports on the key learning points arising from the initial steps taken by an Irish university on its CI journey. Design/methodology/approach A case study strategy was adopted following a participatory research approach. This approach supports reflexivity and also provides access to all relevant documentation and staff within the case university. Thematic analysis was supported by data reduction and display techniques. Findings The introduction of a LSS approach rather than a reliance on lean alone introduced a structured methodology (DMAIC) that supported simplification of a number of administrative processes. A number of specific improvements were achieved including: Cycle time and cost reduction; customer or employee satisfaction; and rework and error reduction. The findings support the importance of the Readiness Factors as identified by Antony (2014), with particular insight into the role of senior and middle management, the impact of training and deployment of expertise. Research limitations/implications This paper is based on an ongoing, longitudinal, empirical study of a single case study in Ireland. Originality/value This paper tracks the development of CI in a HEI in a longitudinal manner and adds to the emerging the literature in this area. The paper evaluates the role of management at various levels, analyses the use of LSS tools and techniques and evaluated the role of training and capacity building. Implications for Management are shared including: design and role of training programmes, role of champions at various organisational levels, including key functional areas and sustaining momentum.

Fair value accounting and the financial crisis: a literature-based analysis

2016 ◽  
Vol 14 (1) ◽  
pp. 49-71 ◽  
Author(s):  
Elisa Menicucci ◽  
Guido Paolucci
Keyword(s):  
Financial Crisis ◽  
Literature Review ◽  
Empirical Studies ◽  
Relevant Literature ◽  
Fair Value ◽  
Research Literature ◽  
Fair Value Accounting ◽  
Comprehensive Overview ◽  
Content Type

Purpose The aim of this paper is to review the main results of accounting research literature examining the role of fair value accounting (FVA) within financial crisis. This research analyzes theoretical and empirical studies on the controversial topic about FVA and its alleged pro-cyclicality in the context of the financial crisis to offer solid reflections for improving the fair value research agenda. Design/methodology/approach This paper consists of a descriptive literature review. Theoretical and empirical research studies were investigated and then systematized in a framework to guide a literature-based analysis and critique of the relevant literature published about this topic. Findings The review reveals that there has been only a limited amount of research into the role of FVA within the financial crisis. This topic has not been researched extensively, and there is no empirical evidence that FVA caused the financial crunch and the subsequent financial crisis. Research limitations/implications The restricted amount of literature that directly deals with FVA in the context of the financial crisis is the main limitation of this paper. The specificity of the theme narrows the coverage. However, the adopted research methodology enabled the main contributions concerning this issue to be collected, to realize a concise and comprehensive portrait of the debate surrounding FVA and the financial crisis. Practical implications This paper can be of use to both researchers and practitioners interested in investigating strengths and weaknesses of the fair value concept for accounting purposes. The paper sets out the main findings of the academic literature and identifies future avenues of theoretical and practical research which may support standard setters to draw up improved accounting regulation. Originality/value Few existing studies consist of a literature review that examines theoretical and empirical researches on the influence of FVA on the financial system. This review offers a comprehensive overview on research literature concerning the responsibility of FVA in causing the financial crisis. The main contribution of this paper relates to further understanding the role and effects of accounting matters concerning fair value in a broad sense within the context of the financial crisis.

Fair value accounting implementation challenges in South Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anuradha Pandya ◽  
Wayne van Zijl ◽  
Warren Maroun
Keyword(s):  
South Africa ◽  
South African ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Fair Value ◽  
Perceived Usefulness ◽  
Developing Economy ◽  
Fair Value Accounting ◽  
Extensive Experience ◽  
Content Type

PurposeThe objective of this research is to explore the challenges being encountered when applying and implementing fair value accounting requirements, focusing specifically on the determination of fair value per International Financial Reporting Standards (IFRS) 13: Fair value measurement (IFRS 13) in the South African capital market.Design/methodology/approachData are collected from 20 detailed interviews, primarily with preparers and interpretively analysed to identify how individuals internalise the requirements of IFRS 13 and the challenges associated with its application. The researchers focus specifically on South Africa because of its status as a developing economy and, at the same time, its extensive experience in applying IFRS.FindingsSouth African preparers appear reluctant to change from a conventional cost-based measurement approach to one grounded in fair value. Primary concerns include the perceived usefulness of fair value accounting and its conceptual appropriateness, given its perceived de-emphasis of the traditional stewardship role of financial reporting. Related challenges to the application of IFRS 13 include concerns about the cost of determining fair value; the inherent subjectivity of fair value measures and the practical difficulty of calculating fair values when markets are not efficient or where business environments are complex and dynamic where Level 1 inputs are not widely available for all assets and liabilities. These challenges encourage preparers to choose accounting policies, which minimise the use of fair value or apply the provisions of IFRS 13 legalistically.Research limitations/implicationsData are collected from a group of respondents from a single developing economy. Additional research on the application of IFRS 13 in other developing markets will be required to conclude on the relevance of economic, cultural and social factors for the understanding and implementation of new accounting standards by practitioners.Practical implicationsStandard setters and regulators cannot assume that new accounting standards will be interpreted and applied as intended. Even when compliance with IFRS is mandatory, preparers have considerable discretion when it comes to operationalising accounting prescriptions. Unless the challenges raised by preparers are addressed, misapplication of IFRS is likely to continue.Originality/valueThe research makes an important empirical and practical contribution by providing primary evidence on the operationalisation of IFRS 13 in a novel setting. It complements earlier research which has focused primarily on the conceptual/theoretical dimension and on American and European perspectives.

scholarly journals Engaging in design activism and communicating cultural significance through contemporary heritage storytelling

2016 ◽  
Vol 6 (3) ◽  
pp. 271-286 ◽  
Author(s):  
Kimberley Wilson ◽  
Cheryl Desha
Keyword(s):  
Cultural Heritage ◽  
Theory And Practice ◽  
Research Approach ◽  
Cultural Significance ◽  
Diverse Range ◽  
Content Type ◽  
Built Heritage ◽  
Action Research Approach

Purpose The purpose of this paper is to discuss the role of contemporary storytelling in preserving built heritage, as a mechanism for extending the useful life of buildings. Design/methodology/approach The authors adopted a qualitative action research approach to consider the role of storytelling. A creative, multi-method approach (i.e. a “Brisbane Art Deco” publication and associated marketing campaign) was used as a case study to explore the contours of such an approach and its efficacy in engaging the community. Findings This paper highlights the potential of contemporary approaches to heritage storytelling, including utilising digital technologies, to engage a diverse range of people that may not have otherwise participated. The authors propose the value of taking a creative and whole-of-society approach – such as that used in this case study – to heritage storytelling. Research limitations/implications The case study discussed provides a phenomenological insight into one version of “contemporary heritage storytelling”. The findings have immediate implications for prioritising research into storytelling for the preservation of built heritage. Practical implications The case study demonstrates opportunities for community engagement through storytelling and highlights potential strategies to effectively contribute to a greater societal value of cultural heritage. Originality/value This research contributes to theory and practice around the management of cultural heritage, and highlights the usefulness of employing such a strategy to reach and engage a broader audience.

A relational view of start-up firms inside an incubator: the case of the ARCA consortium

2018 ◽  
Vol 21 (4) ◽  
pp. 601-619 ◽  
Author(s):  
Davide Di Fatta ◽  
Francesco Caputo ◽  
Gandolfo Dominici
Keyword(s):  
Design Methodology ◽  
Single Case ◽  
Research Approach ◽  
Short Term ◽  
Collaborative Relationships ◽  
Content Type ◽  
Start Up

Purpose Analyzing the entrepreneurial ecosystem related to the ARCA consortium, the purpose of this paper is to study the relationships among the start-up firms inside an incubator. Design/methodology/approach Thanks to the adoption of the relationships concentric model and the density concentric model, the paper highlights the role of relational conditions for innovative projects in partnership among the incubated firms. Reflections herein are tested via a qualitative research approach based on a single case study: the ARCA consortium. Findings This research found that about 32 percent of relationships inside the incubator support the emergence of short-term relationships among the incubated firms. Furthermore, about 18 percent of the relationships support the emergence of strong collaborative strategies for the implementation of long-term relationships resulting in innovative pathways: innovative projects in partnership. Originality/value The most interconnected firms inside the incubator are those that play a central role also in the innovation pathway developing the higher number of innovative project in partnership. This finding emphasizes a correlation between collaborative relationships and innovation inside an incubator ecosystem.

Regime change in the accounting for goodwill

2017 ◽  
Vol 25 (1) ◽  
pp. 43-69 ◽  
Author(s):  
Md Khokan Bepari ◽  
Abu Taher Mollik
Keyword(s):  
Information Content ◽  
Regime Change ◽  
Accounting Standards ◽  
Fair Value ◽  
Fair Value Accounting ◽  
Content Type ◽  
Goodwill Impairment ◽  
Accounting Measurement ◽  
Business Combination ◽  
The Impact

Purpose This study aims to examine the impact of the recent regime change in accounting for goodwill, from the systematic periodic amortisation to the impairment testing, on the frequency and the extent of goodwill write-offs in the context of Australia. It also examines the impact of the change from the amortisation approach to the impairment approach on the value relevance of older goodwill. Design/methodology/approach The authors approach the first research question by comparing the actual amount of goodwill impairment charge by the sample firms with the minimum “as if” amortisation charge that would have been required under the amortisation regime. The authors approach the second question using a modified Ohlson model (1995), similar to Bugeja and Gallery (2006). The sample consists of 911 firm-year observations with the number of observations in the particular year being 238, 242, 220 and 211 in 2009, 2008, 2007 and 2006, respectively. Findings The findings suggest that the adoption of the impairment approach has decreased the frequency and the amount of goodwill write-off. The goodwill impairment amount is substantially less than the “as if” amortisation amount that would have been required under the amortisation regime. The results also suggest that older goodwill is now value-relevant, whereas goodwill purchased during the current year is not value-relevant. One reason for this may be that AASB 3: Business Combination allows for the provisional allocation of the purchase price to goodwill to be allocated to other identifiable intangible assets latter on. Hence, during the year of business combination, investors do not form a firm view of the amount of goodwill arising out of the business combination. Research limitations/implications This study uses data for the first four years since the inception of the impairment approach. Practical implications The findings of this study have important implications for the fair value accounting debate. The discretions allowed the managers under the impairment approach to improve the information content of goodwill. The relatively low levels of goodwill impairment even during the 2008-2009 global financial crisis contradict to the apprehensions found in the literature that managers will use the goodwill write-off as a tool for downward earnings management. The findings also imply that if managers are allowed with adequate flexibility through accounting standards rather than stipulating some systematic and mechanistic rules, the information value of the accounting measurement may improve. Social implications The findings feed into the debate of “rule-based” versus “principle-based” accounting standards and favours the “principle-based” accounting standards. The findings also contribute to the accounting measurement literature by concluding that if allowed with discretionary choices, managers may not always opt for the conservative accounting measurements (such as, recording goodwill write-offs). Originality/value Adopting an alternative approach, this study shows that the fair value accounting for goodwill has resulted in an optimistic approach to goodwill write-offs. It has also improved the information content of reported goodwill. This is the first known study addressing the research questions in consideration after the adoption of the goodwill impairment approach.

Fair value in financial statements after financial crisis

2015 ◽  
Vol 16 (3) ◽  
pp. 312-332 ◽  
Author(s):  
Daniela Majercakova ◽  
Miroslav Skoda
Keyword(s):  
Fair Value ◽  
Theoretical Background ◽  
Research Approach ◽  
Fair Value Accounting ◽  
Current Crisis ◽  
Group Discussions ◽  
Content Type ◽  
Historical Cost ◽  
Advantages And Disadvantages ◽  
The Cost

Purpose – The purpose of this paper is to examine and depict the advantages and disadvantages connected to the fair value, providing the reader with objective information and thorough insight into the problems and benefits of fair value. Partial objectives of this paper are to define the concept of fair value, to provide information about theoretical background and evolution of fair value and to examine and describe the possible future development of fair value. Design/methodology/approach – Findings in the paper are based on study of existing literature and also on study using the open-ended approach of grounded theory, including 50 interviews and two group discussions with professional accountants dealing with the fair value accounting in practice. Findings – According to the advantages and disadvantages of the concept of fair value in accounting, it is quite obvious and clear that this concept is far from being perfect. It is very difficult to determine whether its contribution to the improvement of accounting is really beneficial. Although the fair-value discussion seems to be far from over now, the current crisis provided an interesting setting to further explore these issues, understand them better and hopefully urge responsible institutions to fix the imperfections within the system to make it work correctly and more effectively. Research limitations/implications – Because of the chosen research approach, the research results may lack generalisability. Therefore, researchers are encouraged to test the proposed propositions further. Practical implications – This paper highlights that historical cost and fair value accounting must not be considered as competitors, as they serve different purposes. Knowledge of fair value is important, although it is not enough. Users also need to know the cost of the investment. In fact, knowing how much resources have been sacrificed to obtain that fair value, they could effectively evaluate stewardship. As a consequence, the adoption of a dual measurement and reporting system should be considered and discussed at a standard setting level. Originality/value – This paper fulfils an identified need to study how fair value accounting can be useful in the future.

Understanding why the role of accounting is unchanged in Indonesian public hospitals

2016 ◽  
Vol 12 (2) ◽  
pp. 203-222 ◽  
Author(s):  
Heru Fahlevi
Keyword(s):  
Case Study Research ◽  
Main Tool ◽  
Public Hospitals ◽  
Research Approach ◽  
Willingness To Participate ◽  
Traditional Role ◽  
Content Type ◽  
Accounting Changes

Purpose This paper aims to understand why an expected enhanced role of accounting in Indonesian public hospitals has not occurred, although serial organizational changes and reform of hospital payment systems have taken place. Design/methodology/approach This study adopts a multiple case study research approach. It was carried out in two Indonesian public hospitals. Interviews were the main tool used for collecting data. The primary interviewees were the top managers, accountants and senior physicians in the hospitals surveyed. Findings Insights from the interviews revealed that the owners’ traditional role of funding deficits plus the conventional mindsets of managements and physicians who are only interested in health outcomes have hindered the infiltration of economic and accounting logic into the management of these two public hospitals. Consequently, the expected accounting innovations, i.e. an enhanced role of accounting in the hospitals’ daily activities did not emerge. Research limitations/implications This case study is not a longitudinal study and the interviewees, particularly senior physicians, were selected based on their availability and willingness to participate in the interviews. Thus, the findings should be treated with caution. Practical implications An enhanced role of accounting and other accounting innovations would indicate that the hospitals are responding as expected to the institutional and financial reforms. Originality/value Contingency theory and institutional theory have been used together in this study which aims to not only discuss the reasons for accounting changes occurring or not occurring, but also to understand the motivations behind the accounting changes or lack of change. Thus, a more comprehensive understanding of accounting innovations is expected.

scholarly journals The Role of Accounting in the Financial Crisis: Lessons for the Future

2012 ◽  
Vol 26 (2) ◽  
pp. 335-351 ◽  
Author(s):  
S. P. Kothari ◽  
Rebecca Lester
Keyword(s):  
Financial Crisis ◽  
Accounting Standards ◽  
Fair Value ◽  
Fair Value Accounting ◽  
Management Incentives ◽  
The Great Recession ◽  
Incentive Structures ◽  
Bubble Rising ◽  
Perfect Storm

SYNOPSIS 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 U.S. 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.

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