Equity Accounting Research Articles

Accountability for equity: can state policy leverage social justice?

This paper advocates working carefully through a tactical, practical engagement with accountability policies for the purpose of increasing educational equity and social justice for children of colour and children from low-income families. It discusses the pervasiveness of systemic racism and its effects in US schools, and explores the complexity surrounding issues of accountability and the possible disruption of this racism. Also described is the possibility of a convergence of interests between supporters of accountability and advocates for social justice. Finally, evidence is presented, from state and school district levels in Texas, that increased educational equity can be leveraged through the careful use of some accountability measures.

Accountability for equity: can state policy leverage social justice?

This paper advocates working carefully through a tactical, practical engagement with accountability policies for the purpose of increasing educational equity and social justice for children of colour and children from low-income families. It discusses the pervasiveness of systemic racism and its effects in US schools, and explores the complexity surrounding issues of accountability and the possible disruption of this racism. Also described is the possibility of a convergence of interests between supporters of accountability and advocates for social justice. Finally, evidence is presented, from state and school district levels in Texas, that increased educational equity can be leveraged through the careful use of some accountability measures.

Earnings, Book Values, and Dividends in a Stewardship Setting with Moral Hazard*

AbstractThe paper addresses the following question: in a multiple‐date agency setting, under what conditions will the dividend policy be of no incentive relevancy? It is shown that if the accounting data—earnings, book values, and dividends — satisfy standard owners' equity accounting constructs, and if these indicate that paying dividends is a zero NPV activity, then dividend policy incentive irrelevancy applies. The basic idea is to ensure that the (history of) abnormal (residual) earnings summarize the relevant information and the solution to the incentive problem. The paper also compares classical value irrelevancy with incentive irrelevancy, and the analysis shows that conditions for incentive irrelevancy are more stringent.

Intergenerational equity and governance in sustainable development policy

With ecological globalization, environmental degradation has become a phenomenon capable of accentuating not only the sources of spatial and temporal conflicts, but also inter-and intragenerational inequities. In this context, it seems important, first of all, to explain the ways in which the taking into account of inter-generational equity in our societies' decisions constitutes a new challenge posing unresolved questions for decisionmakers. Secondly, we see that the implementation of effective policies for sustainable development (that is, taking real account of the long-term and of equity concerns), requires the development of new perspectives and practices in science and of new governance institutions capable of responding to these new challenges. Thirdly, we show that these changes imply, for economic analysis and the advice that can be offered by economists, a shift from a substantive rationality perspective towards a procedural rationality. This latter encourages the development of new analysis and decision support tools based on a wider sharing of information and efforts at reconciling different perspectives in the assessment of risks and equity concerns. This new rationality will be expressed as a process of debate and dialogue taking place continuously in all phases of the policy process.

Capital markets research and accounting standard setting

Accounting academics and practitioners have been known to question whether accounting research is as efficacious as it might be. This paper focuses on capital markets‐based research in accounting and how its potential contribution to the wider regulatory process can be realised more fully. Examples used are: research on corporate regulation; the move to ‘harmonise’ accounting standards; accounting for R&D; accounting for goodwill; and equity accounting.

Equity Accounting: Empirical Evidence and Lessons from the Past

This paper analyses the recently issued accounting standard prAASB 1016 and its predecessor ED 71 in the light of the historical development of equity accounting in Australia and overseas. Empirical research shows that equity accounting was not universally adopted before being banned and that, given a voluntary choice of accounting method, firms are more likely to adopt equity accounting when they hold material investments in associated companies, when the investments in associates are unlisted and when there is a greater level of interdependency between the investor and investee, as evidenced by the existence of cross‐guarantees or the level of non‐capital transactions which take place. There is no empirical evidence supporting the degree of influence as an important consideration in the adoption decision.

The Downside of Harmonisation Haste: The Equity Accounting Experience

While the main harmonisation objective of legalising the use of equity accounting in the consolidated financial statements has been achieved to the relief of Australian business, the Australian standard‐setting boards have had less success in harmonising the detailed application and implementation rules. With no clear conceptual direction, they appear to have arbitrarily adhered to, and deviated from, international precedents on ancillary issues of significance to the users and preparers of financial statements.

The Equity Accounting Saga in Australia: Cyclical Standard Setting

Equity accounting in Australia has had a long, chequered history. This article examines that history by reference to a succession of six Exposure Drafts, one Statement of Accounting Practice and two Standards issued between 1968 and 1995. We adapt Nobes' (1991, 1992a. 1992b) cycle model of regulation to explain variation in ‘standardization’ across these documents. Nobes defined ‘standardization’ to mean the restriction of choice in accounting methods but we modify the concept to allow for measurement rule ‘improvements’ and changes in required disclosure levels. Nobes' cycle model has four stages: a starting point of varied practice: energy inputs, often crises, drawing attention to the issue at hand: forces opposing and forces in favour of standardization. A cycle‐ like pattern of variation in standardization emerges in the present context. Potential shortcomings of the cycle model are addressed, including Skerratt and Whittington's (1992) criticisms of Nobes' cycle model. The article extends the literature with respect to a cyclical explanation of the standard setting process. The cycle pattern evident here reflects a slow and incomplete resolution of various conceptual and legal difficulties in regulating equity accounting in Australia.

Affective and cognitive influences in social dilemma game

AbstractAn experiment is reported that examines the effects of emotional mood and evaluative priming on cooperation in a social dilemma game. Unlike an associative‐network account or an equity account of mood‐dependent prosocial behaviour. The present approach assumes that the primary effect of elated mood is to increase behavioural variability rather than altruism or cooperation per se. Accordingly, a positively emotional state serves the function of freeing the individual from the need to optimize local profits and increasing the range of behavioural judgments and decisions. As a consequence, positive mood may sometimes produce a secondary increase of prosocial behaviour (especially when the normal behaviour is rigidly competitive) but positive mood may at other times lead to antisocial tendencies and transgression. The empirical findings are consistent with such an interpretation. Cooperation in a four‐person dilemma game increases when positive connotations of cooperation andnegative connotations of competition are primed in a preceding verbal learning task. However, the mood manipulation does not directly affect the decision to cooperate but only indirectly via increased variability. In fact, subjects in good mood make more cooperative as well as more competitive choices than people in bad mood. The notable priming effect does not support the pessimistic view that the cooperation is largely determined by crystallized personality factors.

Distinguishing between liability and equity instruments

This article discusses the issues enumerated by the Financial Accounting Standards Board (FASB) in its Discussion Memorandum, “Distinguishing Between Liability and Equity Instruments and Accounting for Instruments with Characteristics of Both.” The salient issues relating to the classification of instruments as being either liabilities or equities are discussed, as are new alternatives of distinguishing between liability and equity items as a means of improving financial statement disclosure.

A critique of the deconstructionist account of gender equity and education.

(1989). A critique of the deconstructionist account of gender equity and education. Educational Philosophy and Theory: Vol. 21, No. 1, pp. 20-24.

Equity accounting: Which investments qualify?

AC110 Accounting for the results of associated companies and non-consolidated subsidiaries continues to be a subject of debate. The selection of an investment for which equity accounting is the appropriate method of reporting, has not been made easier by definitions based on competing criteria. This paper challenges the validity of a quantitative benchmark and examines the circumstances which purport to indicate the existence of a qualitative measure. It is contended that there is, in fact, only one criterion upon which a qualifying investment can be selected, and that neither of She alternative definitions is wholly acceptable.

Verbal accounts and attributions of social motives

The effects of verbal accounts offered by a threatener on targets' subsequent attributions of the threatener's social motives was studied. Following a standardized interaction in a Prisoner's Dilemma game the subjects' opponent offered one of three accounts for using threats: cooperative intent, establishment of transrelational equity, or ignorance. In a fourth condition the confederate offered no account for his actions. Attributions were assessed by having subjects rate each of four responses representative of the social motives of cooperation, competition, apathy, and deceit in five different situations. It was found that the type of account had specific attributional effects. A cooperative account led to a correspondent inference of a cooperative disposition, a transrelational equity account was apparently perceived as illegitimate and led to an attribution of a deceitful motive, and an excuse of ignorance was linked with apathy.

International Accounting Compromises: The Case of Consolidation Accounting

Publisher Summary This chapter discusses the international accounting compromises and the case of consolidation accounting. In the United States and Canada, consolidated statements are usually published as the sole vehicle for reporting financial data to holding companies shareholders. In United Kingdom, consolidated statements appear in conjunction with parent company data. Moreover, the publication of consolidated statements is not compulsory and is only one way of complying with the UK Companies Acts' requirements for reports to supplement the financial statements of holding companies. The legislation requires the publication of group accounts. The AISGs claim that equity accounting is not a valid substitute for consolidation may be supportable but only in terms of specific assumptions about what either procedure is intended to achieve. If consolidated statements were intended to overcome the deficiencies of conventional methods of handling intercorporate investments so as to obtain a better impression of parents overall earnings, then equity accounting would seem to be a perfectly adequate substitute for consolidated reporting.

Equity Accounting and Investment Value: Another View

(1974). Equity Accounting and Investment Value: Another View. Accounting and Business Research: Vol. 4, No. 15, pp. 207-209.

Equity Accounting and Investment Value

Equity Accounting and Investment Value