Consideration Of Contingencies Research Articles

Accounting treatment and impact of gambling agreement in Lianchuang Co., LTD

With the full entry of China's capital market into the registration system, the merger and acquisition activities of listed companies will become more and more market-oriented. In order to reduce the transaction risk of the two parties, the listed companies will often attach a gambling agreement in the merger and acquisition business. This paper adopts the case study method, with Shandong Lianchuang Internet Media Co., Ltd. acquired Shanghai Pan Investment Network Technology Co., Ltd. as the research object, and the analysis of Lianchuang Company in 2017-2020 accounting treatment. Summing up the current business accounting standards related to the gambling agreement accounting treatment facing the dilemma. It can be seen from the accounting treatment of contingent consideration that there are still some misunderstandings in the listed companies' understanding of contingent consideration, which reflects the lack of professionalism in the accounting treatment regulations related to the gambling agreement.

Optimal Scheduling of Integrated Energy System Considering Electric Vehicle Battery Swapping Station and Multiple Uncertainties

In recent years, there has been rapid advancement in new energy technologies aimed at mitigating greenhouse gas emissions stemming from fossil fuels. Nonetheless, uncertainties persist in both the power output of new energy sources and load. To effectively harness the economic and operational potential of an Integrated Energy System (IES), this paper introduces an enhanced uncertainty set. This set incorporates N-1 contingency considerations and the nuances of source–load distribution. This framework is applied to a robust optimization model for an Electric Vehicle Integrated Energy System (EV-IES), which includes Electric Vehicle Battery Swapping Station (EVBSS). Firstly, this paper establishes an IES model of the EVBSS, and then proceeds to classifies and schedules the large-scale battery groups within these stations. Secondly, this paper proposes an enhanced uncertainty set to account for the operational status of multiple units in the system. It also considers the output characteristics of both new energy sources and loads. Additionally, it takes into consideration the N-1 contingency state and multi-interval distribution characteristics. Subsequently, a multi-time-scale optimal scheduling model is established with the objective of minimizing the total cost of the IES. The day-ahead robust optimization fully considers the multivariate uncertainty of the IES. The solution employs the Nested Column and Constraint Generation (C&CG) algorithm, based on the distribution characteristics of multiple discrete variables in the model. The intraday optimal scheduling reallocates the power of each unit based on the robust optimization results from the day-ahead scheduling. Finally, the simulation results demonstrate that the proposed method effectively reduces the conservatism of the uncertainty set, ensuring economic and stable operation of the EV-IES while meeting the demands of electric vehicle users.

Enhancing power system observability: For simultaneous placement of PMUs and PFMs with contingency considerations

Enhancing power system observability: For simultaneous placement of PMUs and PFMs with contingency considerations

The mediating performance role of staffing options in MNE subsidiary strategies within rapidly deteriorating environments

PurposeIn an environment of intensive global mobility, this study aims to investigate the performance role of staffing choices within diverse MNE subsidiary strategies. Incorporating the integration-responsiveness (IR) framework with a contingency perspective, this study proposes that the performance success of distinct MNE subsidiary strategies depends on staffing choices. This study argues that performance differences of staffing choices such as assigned expatriates, self-initiated expatriates, former inpatriates and host-country nationals derive from their different knowledge/experience advantages regarding the intra-firm environment and local market conditions.Design/methodology/approachThe study utilizes a unique sample of 169 foreign subsidiaries located in Greece that faced the outbreak of the COVID-19 pandemic (in 2020). For robustness reasons, this study also captures the imposition of capital controls (in June 2015).FindingsThis study finds important mediating performance effects of a diversified human resource portfolio across distinct subsidiary strategies in difficult times. Integration strategy tends to use more assigned expatriates, locally responsive strategy tends to utilize more host-country nationals, whereas multi-focal strategy favors self-initiated expatriates and former inpatriates, with positive subsidiary performance effects accordingly. So, staffing policies that are suitable to balance the needs of Human Resource Management (HRM) portfolio differ from strategy to strategy. Moreover, this study finds that managing HRM diversity is crucial in turbulent times.Originality/valueWhile the empirical evidence has been predominantly accumulated from large economies, largely neglecting performance effects of MNE subsidiary staffing in crisis contexts, the analysis sheds light on a small open economy (i.e. the Greek context) emphasizing rapidly environmental deterioration. The findings extend existing theorizing on international performance and HRM management by providing an integrative conceptual framework linking integration-responsiveness motivated strategies with distinct groups of high-quality human resources under contingency considerations, so creatively synthesizing largely fragmented IB and HRM research streams. The study provides valuable insights into the performance role of non-conventional staffing choices such as self-initiated expatriates and former inpatriates, given that relevant studies examine either exclusively expatriates or compare expatriates with host country nationals, reaching inconclusive results.

An ADMM-Based Distributed Optimization Method for Solving Security-Constrained Alternating Current Optimal Power Flow

When optimizing electric power system operational decisions, it is of great importance to prevent potential failures in both the system operation and the optimization algorithm. In “An Alternating Direction Method of Multipliers-Based Distributed Optimization Method for Solving Security-Constrained Alternating Current Optimal Power Flow,” Gholami, Sun, Zhang, and Sun propose a novel two-level algorithm that (1) effectively prevents power system operational failures through consideration of impactful contingencies and (2) guarantees convergence when parallelized on a computing cluster with multiple nodes. Extensive numerical experiments suggest that the proposed algorithm is able to provide high-quality feasible solutions under the time limit of 10–45 minutes for various synthetic and industrial networks with up to 30,000 buses and 22,000 contingencies, comparable with the size of the U.S. power grid.

Optimized Escape Path Planning for Commercial Aircraft Formations

There is growing interest in commercial aircraft formation flight as a means of reducing both airspace congestion and the carbon footprint of air transportation. Wake vortex surfing has been proven to have significant fuel-saving benefits; however, commercial air transportation has yet to take advantage of these formation benefits due to understandable safety concerns. The realization of these formations requires serious consideration of safety contingencies during closer-in maneuvering of large commercial aircraft. Formation contingency scenarios are much more complex than those of individual aircraft and have not yet been studied in depth. This paper investigates the utility of an optimization modeling approach in generating maneuvering and escape paths for commercial formation aircraft by comparing model-generated paths with pilot-generated escape plans. Three high-altitude commercial aircraft formation scenarios are presented: formation join, formation emergency exit, and formation escape. The model-generated paths are evaluated and compared with pilot-generated escape plans using the author’s pilot expertise. Model results compare well with pilot intuition and are useful in presenting solutions not previously considered, in evaluating separation requirements for improvement of escape path planning, and in confirming the viability of the pilot-generated plans. The novel optimization model formulation presented in this paper is the first model capable of generating exit and escape paths comparable to pilot-generated plans. It is also the first model to incorporate path avoidance of persistent and drifting wake turbulence.

Opening up early or late? The effect of open innovation before and after product launch on new product market performance

Despite a growing literature on open innovation in new product development (NPD), little is known about when openness is most beneficial during the innovation process. This study investigates the effectiveness of opening up NPD projects early or late, or before or after product launch, leading to four intertemporal NPD strategies: closed-closed, closed-open, open-closed, and open-open. Utilizing novel data of product innovation and market performance of 536 digital games, the authors study the effects of intertemporal NPD strategies on new product market performance under moderating effects of technological capability, marketing capability, and project complexity. The results indicate that the early open (open-closed) NPD strategy outperforms the late open (closed-open) strategy. Furthermore, the positive effect of open NPD strategies is stronger when technological capability is high, but weaker when marketing capability is high and when projects are complex. This study contributes to the literature by proposing a typology of NPD strategies that conceptualizes open innovation before and after product launch, and by demonstrating that NPD benefits from early openness, although firms decide to close the NPD project after launch. Managerially, this study offers empirical evidence that open NPD strategies with a consideration of project contingencies are important predictors of new product success.

The competitive effects of financial and fiscal institutional arbitrage opportunities: Evidence from cross-border M&AS

This study investigates whether and when differences in the financial and fiscal regulatory systems between the countries of acquirers and targets that engage in cross-border M&As influence rivals' corporate responses. Drawing on the institutional arbitrage and competitive dynamics logics, we argue that cross-border M&As that provide opportunities for financial institutional gains for the targets and fiscal institutional gains for the acquirers pose a threat to the rivals and hence provoke an increase in the number of rivals' corporate responses. Additionally, we argue that the effect of cross-border M&As providing financial and fiscal institutional arbitrage opportunities on the number of rivals' corporate responses gets stronger with rivals' awareness, motivation, and capability to respond. An analysis of a unique dataset of rivals’ corporate activities before and after large horizontal cross-border M&As of their competitors in the manufacturing industry between 1999 and 2014 provides support for our main theoretical arguments and provides some contingent considerations.

Perspective on Accounting Measures’ Challenges When Merging International Firms Under Contingent Considerations

Perspective on Accounting Measures’ Challenges When Merging International Firms Under Contingent Considerations

Strategic Planning Pitfalls in Society 5.0: A Systematic Literature Review

Although strategic planning relevance has its ups and downs, it has shown that it can always be a reference point to guide managers and management. This paper aims to clarify if the strategic planning pitfalls identified in the mid-90s still apply to today's reality. Also, to validate strategic planning's importance in society 5.0 while exploring its barriers from a dynamic capability’s perspective. A bibliometric analysis focused on strategic planning pitfalls and the use of indexed journals/citations to validate the study relevance. To achieve this purpose, this study performs a systematic literature review and content analysis of 68 articles from 37 journals. The main results of strategic planning research revealed: (1) The relevance of strategic planning in society 5.0, (2) the appliance of dynamic capabilities creating a defensive business model, and (3) the two essential dimensions which can impact most strategic planning, and (4) the new pitfalls in today’s context. Guided by dynamic capabilities theory, this paper seeks to promote insights related to the importance of strategic planning, adds value to the body of knowledge, and identifies contingency considerations that help explain the results on the relationship between strategic planning and the present context.
 
 Received: 1 July 2022 / Accepted: 29 August 2022 / Published: 2 September 2022

Engaging Students in Optimization Modeling: Gaining Business Disruption Insights

How can students prepare for potential business disruptions? The approach shown in this paper uses optimization modeling with parametric sensitivity analysis and further broadens the search for insights with structural sensitivity analysis in a series of contextual exercises. The exercises prompt students to identify critical resources for business impact analysis by extending production planning to include scenario analyses and contingency considerations. During virtual office hours, one participant described the exercises in terms of a “mystery” to solve. For an open-ended contingency planning question, some participants even proposed new product design decisions. Upon conclusion of the study, 25 of the 28 participants recommended the exercises for future semesters. Funding: Graduate assistant support for P. E. Billings and N. C. Belford was provided by the College of Business at the University of West Florida. Supplemental Material: The supplemental material is available at https://doi.org/10.1287/ited.2022.0279 .

E&P Notes (April 2022)

E&P Notes (April 2022)

Volatility of Financial Metrics: Important Data for Contingent Consideration Valuations

This article presents the first detailed statistical analysis of the volatilities of various commonly encountered financial metrics used in contingent consideration (and earn-out) agreements. The valuation of contingent consideration using an option-based methodology and non-equity volatilities is becoming more common in business valuation. We provide clear evidence that the volatility of five financial metrics—revenue; earnings before interest, taxes, depreciation, and amortization (EBITDA); EBIT, net income, and total assets—is strongly, negatively related to firm size and profitability. However, contrary to common belief, the volatility of these metrics is not related to a firm's financial leverage. We also calculated the volatilities using four different methodologies that are employed in practice. Although no theory guides the selection of methodologies, based upon our work, we have found that the year-over-year growth rate, using a quarterly frequency, provides the most reasonable results.

From the Editor

I hope you all had a safe, healthy, and enjoyable holiday season. I would like to start off this issue remembering Dr. Shannon Pratt. Shannon Pratt was a pioneer and driving force behind the progress made by the business valuation profession. With his publication of the First Edition of Valuing a Business in 1981, he codified business valuation as we know it today. Since then, he has been the engine that's driven the growth of our profession whether it's his books, teaching, conference presentations, mentoring or the various other things he has developed over time, all of them have become an integral part of our daily practice and it's difficult to imagine the profession without him. Our editor emeritus, Roger Grabowski, has provided an article in this issue which describes his time with Shannon while they were working on the latest edition of Cost of Capital. We've included that in this edition in remembrance of Shannon Pratt and all he's done for our profession.We also have some announcements. First, American Society of Appraisers has adopted the recently released International Business Valuation Glossary, which is included in its entirety in this issue. The glossary is the result of a collaborative effort by ASA, CBV Institute, RICS, TAQEEM and the International Valuation Standards Council, who have worked together to provide a common understanding and consistency of technical terms used within the various sub-practice areas of business valuation. Our industry has evolved rapidly over the last 20 years when the glossary was last updated, particularly with the introduction of fair value in IFRS and US GAAP and the increasing importance of intangible asset valuation. The update process began in May 2019. Following the December 2020 public comment period, more than 40 parties provided valuable input, which was thoroughly reviewed and vetted where appropriate. ASA's technical advisors were Lucas Parris and former BVC Chair, Jeff Tarbell. Thanks to Jeff and Lucas and all those involved in this monumental effort.Second, we have a change of leadership. Erin Hollis is the new chair of ASA's BVC. Erin replaces Ken Pia, who was wonderful to work with these past two years. Thanks to Ken for his service and welcome to Erin. Please make sure to read Erin's letter which is attached to this issue of the Business Valuation Review.And now on to our contributors. Vincent Covrig et al. address the volatility of financial metrics used in valuing contingent consideration. Also, Gil Matthews provides a biting commentary on pre-IPO studies. There's been so much written in this area; however, Gil provides additional research and his own opinion's regarding the applicability of them in practice. Thanks to Vincent and his esteemed colleagues and also to Gil for their contributions to our body of knowledge.And to all our readers, please enjoy the issue and as always let me know if you have any ideas for future articles.

Rapid development of a decision-aid for people with dementia and their families during COVID-19

IntroductionCOVID-19 as a pandemic has disproportionately affected older adults, including those with dementia. The effects on health and social care systems has necessitated a rapid-response approach to care planning and decision-making in this population, with reflexivity and responsiveness to changing individual and system needs at its core. In light of this, a decision-making tool to help families of persons with dementia was developed using a combination of qualitative data and evidence synthesis.ObjectivesTo develop a decision-aid using a combination of assessment and evidence-gathering methods for families of persons with dementia.MethodsSemi-structured interviews with helpline staff from national end-of-life and supportive care organisations formed the basis of the tool design. Co-design with people living with dementia, current and former carers and experts in general practice and social care shaped the next stage. Simultaneously, a rapid review of current evidence on making decisions with older people at the end of life was undertaken.ResultsOutput from interviews covered many topics, including trust, agency and confusion in making decisions in the context of COVID-19. The rapid review of existing evidence highlighted the need to consider both process and outcome elements of decision-making.ConclusionsCombining different sources and forms of evidence was efficient and valuable in creating a novel decision-making tool for persons with dementia and their families within the context of COVID-19. The decision-aid covered care planning, caregiver support systems, access to information and contingency considerations. Upon publication, the tool was adopted by NHS England and other leading healthcare organisations.DisclosureNo significant relationships.

The scale and scope of corporate litigation exposure and the factors that explain contingent loss disclosures

We collect a sample of 75,421 lawsuits filed against 90,255 public company defendants from 2006 through 2016 using federal district court docket information. These lawsuits involve an array of allegations, including product liability, civil rights discrimination, improper compensation and labor practices, antitrust violations, pollution, trademark and copyright violations, and patent infringement. The vast majority of these lawsuits likely do not make it onto the radar of investors: only 3% of lawsuit-defendants disclose the pending litigation at any point, with disclosure by plaintiffs and fellow defendants increasing the overall rate of disclosure to 6%. If disclosed, the decision to do so typically occurs early in the legal process, suggesting that the type of claim and the circumstances surrounding its filing—as opposed to how the lawsuit unfolds over time—drive the decision to disclose. Prior SEC scrutiny, the desire to hide potential losses that may make existing debt look particularly risky, and incentives to shape the narrative relative to other available lawsuit information factor into firms’ disclosure decisions. We also find that increased contingency-related concerns expressed in SEC comment letters coincided with the FASB’s consideration of loss contingencies in the 2008 to 2012 timeframe. Yet, the rate of disclosure (particularly of losses) declined over our sample period. Overall, our findings inform the debate about contingency disclosure standards and enforcement. In so doing, our study offers researchers a measure of overarching legal exposure that allows for the study of litigation risk, as well as firm risk more broadly, from new and increasingly relevant perspectives.

Configuring ecosystem strategies for digitally enabled process innovation: A framework for equipment suppliers in the process industries

Digitalization offers new opportunities for equipment suppliers to support the competitiveness of process industry firms through participating in digitally enabled process-innovation initiatives. However, doing so is not without challenges as it requires equipment suppliers to align with multiple actors within an extended ecosystem to deliver complex product-service software systems as embodied sources of process innovation. This creates various challenges for the equipment supplier because it has to secure its role in an ecosystem where it must simultaneously cooperate and compete with other ecosystem actors. Therefore, it needs to consciously determine what ecosystem strategy to apply. Using multiple exploratory case studies, we investigate how equipment suppliers configure appropriate ecosystem strategies to realize digitally enabled process innovation for process industry firms. Our findings emphasize that different industrial customer contexts require different ecosystem strategies; we have identified four archetypical ecosystem strategies (orchestrator, dominator, complementor, and protector). The core insights from our research are converted into a decision tree framework to guide equipment suppliers in configuring the appropriate ecosystem strategy based on the industrial customer context. Key contingency considerations include determining an appropriate role in the ecosystem (leader or follower) and a suitable coopetitive approach (cooperation dominated or competition dominated).

Editorial

Welcome to the eight-issue of the Journal of Construction Business and Management. This edition of the journal presents scholarly discussions on theoretical and empirical challenges confronting best practices and policies in construction businesses and projects. The intention is to understand the practice and theoretical lens used in its explanation or interpretation. This edition of the journal covers the following subjects: subcontracting processes, contingency management, social license, risk measurement, project success, quality process implementation and competitive advantage. The issue contains five articles written by eight scholars based in Ghana, India, Nigeria, and South Africa.
 The first paper by Akinwale and Olusanya (2020) examines subcontracting processes' influence on wages and workloads in the construction industry. The study found that subcontracting processes significantly influenced workers’ participation in wage determination and workloads. The findings suggest that working in a subcontracting system alienates subcontracted workers from the determination of wages and workloads and thereby showing the need for adequate protection for these workers. The second paper by Maniar (2020) evaluates the current state, the issues faced in contingency management and its effectiveness in curbing cost overruns. It seems inevitable that contingency management could impact cost overrun problems. Not so reveals the study results, which shows that contingency considerations were only useful in accommodating cost overrun problems in 18% of projects studied. Based on these findings, the study recommends that contingency be estimated based on the scientific approach to addressing project risks instead of the commonly used subjective approach.
 Perhaps the most compelling argument is why a construction company must acquire regulatory permits that embrace all stakeholders before a construction project is approved as outlined in Danku (2020). The paper highlights that not all formal processes embrace all stakeholders such as the hosting community who need to consent to a firm’s activities to complete the symbiotic relationship. The study found a limited understanding and restricted application of the concept of social licence – the commitment of residents towards acceptance, approval and support for a project to exist within a community, by construction professionals. The paper recommends industry sensitization and education to harness a company's benefits from acquiring a social licence. The fourth paper by Renault, Agumba and Ansary (2020) examines the influence of risk management on the project success of Small and Medium Enterprises (SMEs). Results reveal that risk management significantly influences construction SMEs' project success by delimiting the risk management criteria to be adopted, establishing the level of acceptable risk and risk timeframe relevant to risk effect and risk likelihood. The paper recommends that the management of SMEs and construction industry professionals adopt risk management to manage their project risks to accomplish project objectives effectively. 
 Although it is generally accepted that construction quality process implementation improves construction project performance, there is limited research into the factors affecting the quality of the road infrastructure projects produced by SMEs. The fifth paper by Nyakala (2020) investigates these factors. The study established that five construction quality process factors affect the quality of road infrastructure projects undertaken by construction SMEs. These factors comprise construction process and design; construction quality management at the site level; the development and implementation of quality procedures and requirements; quality benchmarking; continuous improvement and communication. The results provide a guideline for the successful construction quality implementation by designers/consultants and managers in the construction SME sector. It helps establish the factors affecting road infrastructure projects' quality and a benchmark for competitive advantage.
 Overall, these articles should spark debate and force professionals, researchers and policymakers to think differently about the construction project and business performance while inspiring new practices. I acknowledge all authors who submitted papers for consideration. I also value the contributions and unrelenting efforts of the JCBM editorial board members and panel of reviewers in ensuring that manuscripts are of high quality and keeping the journal on the path to attaining the expected standard and quality. Criticisms, feedback and suggestions are welcome from readers on how to improve the quality of the journal. 

Cost optimized dynamic design of offshore windfarm transformers with reliability and contingency considerations

Application of Dynamic Thermal Rating (DTR) for optimal utilization of transmission system components has been addressed in several studies. For Offshore Wind Power Plants (OWPPs), as a consequence of intermittent wind generation combined with favorable ambient conditions and strict design regulations, power transformers tend to be over-dimensioned. Experience suggests that transformer lifetime exceeds OWPP life by tens of years, therefore DTR-based design of transformers can facilitate the optimization of OWPP export system.The recent breakthroughs in Thermo-Electric Equivalent (TEE) and aging models of transformers suggest that temporal development of Top Oil (TOT) and Hot Spot (HST) temperatures can be calculated efficiently, which when combined with monitoring of moisture and oxygen development can accurately assess the transformer health in real-time using Degree of Polymerization (DP). However, the economic optimization of offshore windfarms substations using DTR and lifetime utilization-based transformer design during the OWPP planning phase has not been addressed in the literature due to the risks involved in balancing system reliability with windfarm profitability.In this paper, a novel strategy is proposed to utilize transformer DTR for cost optimization of offshore windfarm export system during the OWPP design phase. Net Present Value (NPV) is used to assess capital cost impacts on transformer and Offshore Substation (OSS) design in year 0, and yearly revenue change over OWPP lifetime due to increased losses and possible energy curtailment as a result of smaller transformers. The unique methodology accounts for varying wind turbine availability due to maintenance and concurs with OWPP design requirements for OSS transformer contingency by generating statistical scenarios based on distribution functions and Markov Chain (MC) models respectively. Moreover, the MC models are adapted for two fundamentally different design concepts for OWPP export system: n-1 contingent and non-contingent. The implementation of probabilistic Markov models to resolve stressful periods with increased transformer loading is distinctive to this paper and offers a unique perspective for DTR-based transformer size optimization. Long-term site assessment data for OWPP including historical wind generation is used for transformer thermal assessment (TOT and HST) based on its load and ambient conditions. Furthermore, the reliability of design for varying construction and commissioning conditions is ensured by tracking DP-based transformer lifetime utilization over the operation period for three scenarios of oxygen and moisture development: conservative, high moisture and high oxygen.The case study of a 1200 MW offshore windfarm with two 220 kV parallel export circuits and four 33/220 kV transformers in one OSS located 50 km off the east coast of UK has been used in this paper. 100 scenarios of wind turbine availability and transformer contingency are simulated and the optimal design is determined for the worst-case scenario. Results indicate that optimal transformer rating can result in high thermal stress and minor energy curtailment during extreme contingency conditions for both the design concepts. However, the reduction in transformer size to align with OWPP operation life can reliably improve the windfarm business case significantly, particularly for the n-1 contingent design concept with conservative transformer moisture and oxygen conditions.

E&P Notes (August 2020)

E&P Notes (August 2020)