Accounting Norms Research Articles

Changes in income of Micro, Small, and Medium-sized Enterprise (MSME) actors in the Pahlawan Village, Tanjung Tiram Sub-District: An analysis of determinants

The growing number of micro, small, and medium-sized enterprises (MSMEs) in Pahlawan village, Coal Regency today necessitates a thorough familiarity with the Financial Accounting Standards of Micro, Small, and Medium Entities (SAK EMKM) in the Pahlawan village community of Coal Regency North Sumatra to ensure the smooth operation of businesses and the availability of reliable information for informed decision making. Financial statements generated in accordance with SAK EMKM would produce accurate and relevant financial statements, easy to comprehend, and can be compared with other comparable companies, allowing MSME participants to learn about the financial performance of their business activities. As a business development perk, SAK EMKM helps micro, small, and medium-sized enterprise (MSME) players more easily get financing from creditors as a business capital enhancer. Most functional SMEs continue to ignore widespread accounting norms in favor of more archaic practices. People in charge of small and medium-sized enterprises (SMEs) and the general public still believe that the lack of SAK EMKM will not have any effect on their business.

NON-PERFORMING ASSETS OF BANKING SECTOR IN INDIA

Priority sector lending, non-priority sector lending, corporate debt restructuring and accumulation of non- performing assets have now become an interesting topic of discussion and debate. Evolution of priority sector credit since social control of banks back in 1967 has a chequered history till emergence of micro finance as a tool of poverty alleviation. Various committees formed by RBI and the Government of India have reviewed progress of priority sector lending and recommended measures for revamping the structural and operational measures related to social banking. On the other side, non-priority sector NPAs and corporate debt restructuring seems to be alarming nowadays. Till the year 2011 the situation was different, but after 2011 with the implication of BASEL II, banks are bound to show their stressed assets and restructuring measures are in full swing. In 2015 the corporate debt restructuring was highest in last 10 years. With the introduction of financial sector reforms and adoption of prudential accounting norms following BASEL convention, the banks have been passing through tremendous crisis with phenomenal growth of nonperforming assets. This paper analyses the growth of priority sector non-performing assets, non-priority sector non-performing assets and its contribution towards building up total non-performing assets and investigates the relationship of non-performing assets with some economic parameters. It also analyses the association of corporate debt restructuring with non-performing assets and tries to find out relationship of the above two. A strong correlation is found between corporate debt restructuring and NPAs. A negative association is found between NPAs and GDP growth.

Совершенствование методов повышения устойчивости гидротехнических сооружений в Якутии

Problems of providing the population and agricultural production by qualitative potable and process water in the Central Yakutia are covered. This territory belongs to the region with acute shortage of water resources which is always a limiting factor of development of agricultural production. For the solution of this burning issue in the 80th years of the last century along the small rivers the systems of hydraulic engineering constructions providing requirements with process water practically of all settlements of the Central Yakutia were constructed. At a construction of all hydraulic engineering buildings the method of construction with preservation of soils of the basis of constructions in a frozen state was applied. When warming the climate which is observed in recent years hydraulic engineering constructions built in regions of a wide spread occurance of breeds of an ice complex and with the considerable volume of water weight, were especially vulnerable. On character and a design they experience continuous threat of damage and demand very attentive relation from the operating organizations. Taking this into account, safe operation of hydraulic engineering constructions in a zone of distribution of permafrost breeds demands new approaches. The article examines features of hydraulic engineering constructions’ operation of agricultural water supply objects in the Central Yakutia. Distinctiveness of hydraulic engineering constructions’ operation is that stability of constructions is intimately bound to temperature impact of a reservoir on ground dams’ body and the basis of constructions. The possibility of inclusion of ways for an intensification of a freezing of constructions in the structure of operational actions is studied. The new method on safe operation of hydraulic engineering constructions as prewinter abatement of the water level in a reservoir accounting volumes and norms of water consumption of the settlement is offered.

An Economic Analysis of Non-Performing Assets of Banks in India

Banking and Financial Institutions are the strength of any countries economy and which plays an important role to the progress to the country. With an increase in the prerequisite of banking systems in the trade and industry development progression, the major challenge that the Bank and the Financial Institutions are facing an increase in Non-Performing Assets. The Central Bank of India (RBI) instructed all the banks to stringent the loan process to avoid the increase in NPA, which is still peaking high every year. According to the credit rating agency CRISIL, the gross NPA (GNPA) has touched almost Rs. 8,06,412 crore as on 31.3.2019 (provisional data). As per RBI provisional data on comprehensive procedures, as on 31.3.2019, the cumulative amount of unrefined NPAs of PSBs and Scheduled Commercial Banks (SCBs) were Rs. 8,06,412 crore and Rs. 9,49,279 crore correspondingly. Numerous wise accounting norms with a focus to NPA have been introduced by the RBI to diminish the Non-Performing Assets. Consequently, to progress the financial health of a banking system Non-Performing Assets management has become an important assignment of the bank. Over the last five years, Government has engaged wide-ranging phases under its 4R’s approach of recognizing NPAs evidently, undertaking and improving value from strained books, recapitalizing PSBs, and transformations in banks and financial system to guarantee a liable besides spot less structure.

A chapter in the Byzantine paleography of accountancy: The fractions in the Book of Ceremonies

Abstract Chapter II, 45 of the Book of Ceremonies, a half-edited dossier pertaining to the naval expedition of 949 against the Arabs at Crete, contains a document which is most banal and singular at once. This is a procurement report of miscellaneous supplies recording in each entry the amount spent and the nature of the supplies acquired, occasionally specifying the price per item or per measure. However common such reports are in ancient and modern accounting, this is the only document of its kind preserved from the middle Byzantine period. In line with the State accounting norms inherited from Late Antiquity, all expenses are listed in gold, the silver miliaresia being recorded as fractions of a golden nomisma. The symbols for fractions have not been recognized by editors, translators and students of the text; they were either disregarded or misinterpreted. Restoring their meaning to these symbols allows not only a coherent reading of the report as a whole and a better understanding of the State purchasing process; it also throws light on prices of many items and on the last-minute enterprise which consisted in building Viking-style boats for the Rus’ warriors participating in the campaign.

Predictive ability of accruals before and after IFRS in the Brazilian stock market

ABSTRACT This study aimed to analyze and assess the predictive ability of discretionary accruals (DAs) and non-discretionary accruals (NDAs) for forecasting future cash flows before and after the convergence with International Financial Reporting Standards (IFRS) in Brazil. The study is warranted due to the scarcity of research in Brazil on the subject and is relevant because it aims to shed light on whether the changes occurring due to convergence with IFRS in Brazil have improved accounting quality. The accounting choices of managers and accountants in the Brazilian stock market, enabled by IFRS, contribute to an apparent improvement in accounting quality in terms of reliability, the faithful representation of entities’ equity and financial positions, and in particular, the predictive ability for forecasting future cash flows. The population was composed of publicly traded companies listed on the Bovespa and São Paulo Stock, Commodities, and Futures Exchange (BM&FBovespa) in 2004 to 2007 and 2010 to 2015. The non-probability convenience sample is composed of 715 enterprises, once companies from the “finance and insurance” and “funds” sectors and even those considered as “holding” were excluded. The data were pooled by year, as they contain different companies over the time series (unbalanced panel data). The DAs and NDAs produced prior to full convergence with IFRS are negative and statistically significant for predicting future cash flows in the Brazilian stock market, which indicated opportunistic/contractual earnings management. One of the possible explanations for this would be the influence of government tax authorities on Brazilian accounting norms, which could induce managers to manipulate accounting results with the aim of reducing earnings in order to pay fewer taxes, for example. The DAs and NDAs produced after IFRS are positive and statistically significant for predicting future cash flows in the Brazilian stock market, signaling the motivation of discretionary accounting choices under the informational aspect. Current DAs and NDAs add informational power compared to current aggregate accruals. It has also been observed that the current DAs and NDAs originating after IFRS in Brazil, compared to current aggregate accruals, have an informational gain in relation to those produced before.

The Problem of NPA of Nationalized Commercial Banks and its Impact on Financial Performance of Banks

Emerging of non-performing assets is a recurrent problem in the Indian banking sector. Over the past two decades, there have been two such episodes when the banking sector was severely impaired by balance sheet problems. A comparative analysis of thetwobanking crisisepisodes-theoneinthelate1990sandone that started in the aftermath of the 2008 Global Financial Crisis is yet to be resolved. The macroeconomic and banking environment preceding the episodes, the degree and nature of the crises and also the policy responses that have been undertaken and discussed. It is concluded by drawing policy lessons from this discussion and suggests some measures that can be adopted to better deal with a future balance sheet related crisis in the banking sector so that the impact on the real economy can be minimized. Managing bad loans and controlling them at lowest level has become paramount important for the banking industry in recent years. After independence India adopted bank based financial system, where banks and financial institutions are major financial intermediaries for commercial sector credit. It is found that NPAs in Indian banking system came into existence consequent to introduction of prudential accounting norms. The impact of NPAs on the Indian economy is not that alarming as witnessed recently in the East African Region, Japan or another parts of the globe, viz., Russia, rescission hit America and Europe. However, even reduced level of NPAs of the Indian banks is still higher as compared to a developed county around 2 percent warrants continued remedial actions and need strategic measures both at macro and micro levels.

Credit Supply Shocks and Human Capital: Evidence from a Change in Accounting Norms

We investigate how credit market frictions affect the channeling of capital inflows to firms, and in turn their effects on the allocation of human capital. To do so, we exploit exogenous variations in banks' equity capital in Portugal over the 2002-2007 period, a period of massive capital inflows, coupled with matched bank-firm-employees administrative data. Firms in a relationship with better capitalized banks increase borrowing, employment and skill intensity. Our results suggest a bank balance-sheet channel of capital inflows leading to a reallocation of not only capital, but also labor and skills.

The valuation of fixed assets in Norwegian health care: an account of change agent struggle

PurposeThis paper aims to explore how accrual accounting is translated into new accounting norms and what role change agents have had in that process. The main research question is: How were private sector accounting norms translated within the Norwegian public health sector?Design/methodology/approachThis study uses framing theory to understand how the different actors involved in the translation frame their arguments. The field study considers the specific case of public health care. The main data sources are archival data combined with semi-structured interviews.FindingsThe empirical study uses framing theory to show how the Big Four consultants worked as change agents to impose a valuation based on a full accrual accounting logic. The first finding shows that there are two framing processes to valuate fixed assets. The central government has a pragmatic framing trying to get the budget in balance, while the Big Four consultants together with private sector accounting experts have an accrual accounting ideology framing. The second finding shows how the Big Four consultants become a change agent by forming alliances with accounting experts, health enterprises and politicians. These findings point to the need to focus explicitly on the role of change agents as drivers of public sector organizational change and the important role accounting as a tool can have.Practical implicationsThe paper is likely to be useful for governments, practitioners and researchers to gain knowledge about the implementation of accrual accounting.Originality/valueThis paper contributes to our understanding of change agent's role in successfully introducing a new accounting logic in the public sector, especially within an inter-organizational setting.

Efectos de la aplicación de IFRS en países menos desarrollados: Revisión de estudios empíricos

El objetivo de este trabajo, es presentar los efectos positivos y negativos que ha tenido la implementación de IFRS en países con menor nivel de desarrollo, ubicados en cuatro regiones: África, América Latina, Asia y Europa Oriental. El método utilizado es una revisión sis-temática de literatura sobre estudios em-píricos publicados en revistas Scopus; esta revisión sistemática se desarrolló, siguiendo los lineamientos de un método legitimado en la academia británica de administración para ese tipo de trabajos. Los estudios empíricos analizados se clasificaron en dos grupos; por un lado, encontramos trabajos que abordan, en simultáneo, las experiencias de más de 30 países en desarrollo y, por otro lado, encontramos un número abundante de estudios de caso por país, donde se analizan tanto la evolución histórica de los estándares contables aplicados en el país, como las características del proceso de adopción de IFRS y los impactos que el proceso ha tenido. En general, los estudios empíricos revelan (1) bajo impacto de la implementación de IFRS sobre los flujos de capital y sobre la “ca-lidad” de la información; (2) resistencia institucional; (3) incompatibilidad de los IFRS con la normativa contable local; (4) necesidades de capacitación de los profesionales contables para la cons-trucción de los informes; (5) priorización de las normas fiscales en las empresas sobre las demás normas; (6) diferencias en el proceso de convergencia entre las Pymes y las grandes empresas y (7) diferencia en las percepciones por parte de los inversionistas y los preparadores de informes. Los organismos de control local y los estándares internacionales de auditoría están presionando institucio-nalmente la aplicación de IFRS.

Régulation ou supervision : quels nouveaux risques ?

Les règles comptables et prudentielles régissant l’intermédiation financière se sont considérablement sophistiquées lors des vingt dernières années en se rapprochant des meilleures pratiques internes des institutions financières. Cette évolution a engendré une plus grande procyclicité et ouvert des options d’arbitrage réglementaire qui ont grandement contribué à la crise de 2008. Les réponses réglementaires qui se dessinent présentent deux risques. D’une part, les évolutions asymétriques de la réglementation bancaire et de celle du shadow banking risquent de conduire à une migration massive du financement de l’économie vers le shadow banking , encore très instable par nature. D’autre part, un retour en arrière vers des règles prudentielles simplifiées à l’excès telles que le ratio de levier peut créer des distorsions importantes dans le financement de l’économie. Un investissement important dans le capital humain de la supervision et une plus grande discrétion des superviseurs dans l’interprétation des règles paraissent mieux à même de pallier les insuffisances mises à jour par la crise. Classification JEL : G01, G21, G28.

APPLICATION OF ACCRUAL PRINCIPLE FOR THE PURPOSE OF LEGAL ENTITIES TAXATION ON CORPORATE INCOME TAX

Foreign scientists recently have given more attention to problematic questions of corporate income tax connection with legal regulation of financial accounting, and have also emphasized financial accounting importance to tax law. However, despite the fact that there are some publications which assess transactions for financial accounting and taxation purposes in practical view in special press, there is not any scientific research on corporate income tax connection with financial accounting in Republic of Lithuania. In addition, scientists of Republic of Lithuania analysis the accrual principle and only define and describe this principle in financial accounting. Consequently, application of the terms by which income and costs are recognized for the purpose to calculate corporate income tax base has not been analyzed.This article aims to define the basic statement on taxation “income is recorded when earned and costs – when they occur”, and to show how the accrual principle should be applied by legal entities to pay corporate income tax. Analysis is based on the systemic review of the Law on Corporate Income Tax, Business accounting standards framed by The Authority of Audit and Accounting, scientific literature and Tax dispute settlement institutions case-law.With reference to the purpose of this article, there are defined the terms which are necessary for recognision income and costs for taxation purpose. The article disclose that for taxable income recognision using the accrual principle must be followed these conditions: 1) the selling entity has transferred to the buyer the risks and rewards of ownership of the goods; 2) it is probable that the economic benefits associated with the transaction will flow to the entity and the amount of revenue can be measured reliably; 3) the costs related to the sale transaction can be measured reliably. Consequently, costs recognision terms for taxation purpose are: 1) only that portion of expenses of the previous and reporting periods that is related to the income earned during the reporting period is recognised as costs; 2) the costs related to the sale transaction can be measured reliably. In addition to this, there is a special term for the appropriate executing of tax burden – to answer the question whether Law on Corporate Income Tax does not provide otherwise?This scientific research reveals substance and application of accrual principle on taxation with corporate income tax aiming to prove importance of financial accounting norms to assessing corporate income tax base.

The Relevance of Financial Reporting on the Performance of Quoted Romanian Companies in the Context of Adopting the IFRS

This paper investigates, in an associative study, the value relevance of the comprehensive income in relation to that of net income, as a consequence of the application of IFRS in Romania, in companies whose securities are admitted for transactions on a regulated market, started with the fiscal year 2012. The paper also analyses in an empirical manner the influence of the Big 4 companies in the direction of improving the relevance of the reporting of the net income and of the comprehensive income for the investors on the financial market, the quality of audit being acknowledged, according to specialised literature, as a means for rendering the accounting figures more credible. The informational usefulness of the net income (pre-IFRS, 2011, and post-IFRS, 2012) and of the comprehensive income (post-IFRS, 2012) is examined on a sample of 65 companies quoted in the Bucharest Stock Exchange. The results of the empirical study confirm that the two categories of accounting results are significantly associated with the share price, reflecting an increased value relevance and usefulness for the investors on the Romanian financial market, after the adoption of the international accounting norms.

La contabilidad gubernamental y la rendición de cuentas del endeudamiento en el estado de Baja California Sur, México

Los cambios en la normatividad contable han implicado que la administración pública estatal emita información financiera sobre las obligaciones financieras. La normatividad contable, establece la obligación de preparar la información financiera sobre los pasivos gubernamentales, y se están plasmando esfuerzos para preparar dicha información financiera.Por la utilidad y la conveniencia de la información financiera, este trabajo está orientado a reflexionar sobre los aspectos que deben ser atendidos para revelar el instrumento de endeudamiento en el ámbito de la administración pública estatal.La deuda pública a corto plazo, es una fuente de financiamiento que puede ser necesaria para el desarrollo económico y social de una economía, sin embargo, a mediano y a largo plazo, puede tener consecuencias importantes y significativas, principalmente, porque esta herramienta es muy utilizada y este uso indiscriminado puede traer consigo severos problemas tanto de excesivo endeudamiento como de insolvencia.Por ello, la presente investigación plantea, efectuar una revisión de los mecanismos de endeudamiento estatales tanto bancarios como bursátiles, ya que, para conseguir el financiamiento requerido, los estados emiten diversos instrumentos financieros y, en muchas ocasiones, se suelen rebasar los límites de deuda establecidos por la ley.En el resultado del estudio se comprende que el mecanismo del endeudamiento está vinculado con la norma contable y legislativa y, aún, falta el compromiso de la autoridad para revelar los instrumentos financieros con los que se contraen las obligaciones financieras, con el fin de acotar límites de deuda.

Deterioro del valor de activos a la luz de la Teoría del Valor

Este artículo pretende, esencialmente, tratar tres temas: primero, estudiar el concepto deterioro del valor propuesto por la NIC 36 a la luz de la teoría del valor planteada por autores clásicos y neoclásicos de la economía; en segundo lugar, se realizará un análisis de cómo la teoría económica, ha aportado al desarrollo de la contabilidad y, finalmente, se reflexionará sobre las restricciones que presentan en su aplicación, los conceptos vinculados al deterioro del valor como el valor de uso y valor razonable y su influencia en la elaboración y presentación de la información financiera.

Professional Knowledge and the Historical Emergence of Accounting Norms

Accounting norms preceded generally accepted accounting principles (GAAP), but little is known about how and why these norms emerged. We hypothesize that private-sector institutions aimed at building a knowledge base among practicing accountants fostered accounting norms before formal standard-setters appeared in the 1930s. Establishing an association between knowledge-building institutions and accounting norms requires that we (1) identify the form and function of specific institutions that developed the professional knowledge base, (2) show that these institutions facilitated professional knowledge development, and (3) illustrate how knowledge acquisition, dissemination, and retention dynamically results in spontaneous emergence of homogeneous behavior indicative of a norm. We provide evidence of an association between knowledge-building institutions and accounting norms using a combination of historical analysis and simulation modeling techniques. While our focus is primarily historical, most of the institutions we investigate still operate today. Thus, our analysis clarifies how modern accounting is shaped by powerful forces that influence practices long before an accounting problem is considered by standard setters.

US GAAP x Contabilidade na América Latina: Impacto das diferenças de normas no lucro reportado das empresas com ADRs na NYSE

The goal of this study is to measure how many differences between accounting norms of the United States and of Latin American countries impact the profit reported by firms of these latter countries. The Gray’s “Conservatism Index”, which measures the degree to which a national accounting system – in this work, Argentina, Brazil, Chile and Mexico – reports lower (“conservative”) or higher (“optimist”) profits than the US GAAP, was calculated. The study encompasses all firms of these countries with ADRs in the NYSE in the period 2001-2005, and is based on published data of SEC’s 20F Forms and on the Economatica’s databank. Mean and median measurements indicate that, in general, the accounting practices of Latin American countries result in profit values that are lower than those reported as per US GAAP. However, mean tests and the frequency distribution show that there is no representative homogeneous pattern, except for Chile, with a mean IC significant at 10% in the sub-periods 2001-2002 and 2003-2005, and for Brazil only in the last studied triennium. Key words: International Accounting, US GAAP, Latin American Accounting Norms, Conservatism Index.

‘Out of the Shadows?’ Accounting for Special Purpose Entities in European Banking Systems

This article focuses on national variations in the engagement of banks in off-balance sheet securitization in three case study countries: Spain, France and Germany. It is argued that the failures in prudential regulation that underpinned the recent financial crisis are not predominantly situated at the international level. This article focuses on the way that national accounting rules determine whether the Special Purpose Entities of banks are off- or on-balance sheet. The analysis shows that national accounting norms are an important building block for prudential regulation, and these are prone to wider political influences.

Mergers in Indian industry: performance and impacting factors

PurposeEven though there is a vast body of research on the performance of mergers in the developed markets, many issues are still unresolved. There is almost negligible research in the form of published papers on the performance of merged firms and the strategic factors impacting this performance, in the context of Indian industry. This study aims to address this gap in knowledge.Design/methodology/approachThe study uses a quantitative method and statistically analyses secondary data.FindingsThe study finds that merged firms demonstrate better operating performance as compared to both their industries and their pre‐merger performance. Merging firms belonging to unrelated industries appear to be performing better in the long‐term as compared to the related firms. Mergers which witness transfer of corporate control demonstrate a better performance than the ones that do not. Sick acquired firms negatively impact long‐term performance.Research limitations/implicationsThe first limitation of the study is that the financial sector has not been included since it follows different accounting norms. The second limitation is that the findings apply broadly across Indian industry and the limited sample size does not facilitate an industry‐specific focus. The study points towards further research using a longer time frame that might help understand longitudinal variations in merged firm performance. It also encourages future finer‐grained studies on each of the factors which impact merged firm performance.Practical implicationsManagers can prudently utilize mergers to improve firm performance in Indian industry. It appears that firms belonging to unrelated industries bestow better long‐term post‐merger cash flow returns. Managers in India do not thus have to constrain themselves to only horizontal mergers. Managers would be well‐advised to improve on their managerial capabilities since this study points towards a developing market for corporate control in the Indian context.Originality/valueThis is probably the first paper of its kind on research on the performance of merged firms in India.

The fiscal effects resulted from the appliance of the IAS/IFRS on the companies in the agricultural domain.

The new fiscal regimes, associated to the civil right reforms, significantly reduce each residual benefit compared to other entity types in what regards the entities based on an agricultural profile, to which a reduced tax regime is applied. The fiscal regime afferent to entities that operate in this regime is capable to represent a real competitive advantage especially in the presence of bigger costs, besides the fiscal obligations that their management implies. The IAS/IFRS standards represent the expression of a full-evolution process of the management information, which wants a global unique accounting norms system. Its appliance, practically, will determine therefore fiscal and accounting known involvements. This paper has as a goal to confront the new aspects introduced by this standards’ application regarding fiscal effects, the purpose being to supply the instruments needed by the economic agents to face, in an adequate way, the current economical context in which they activate. The authors’ attention is focused, mainly, on the problems that the fiscal harmonization within the EU states implies.