Financial Reporting Standards Research Articles

Accounting of Asian Options Contracts Within The Scope of The Turkish Accounting and Financial Reporting Standards (TAS-TFRS)

Asya opsiyon sözleşmeleri standart olmayan opsiyonlar arasında sıklıkla kullanılan opsiyon sözleşmeleridir. Bu opsiyon sözleşmelerinin diğer standart opsiyon sözleşmelerinden ayırt edici özelliği opsiyon priminin düşük olması, sözleşme tarihindeki dayanak varlığın fiyatı ile uygulamaya koyma tarihinde fiyat aralığının daha az olması nedeniyle makul düzeyde kar veya zararın ortaya çıkmasıdır. Dolayısıyla yatırımcılar riskinden korunmak amacıyla da bu opsiyonları tercih etmektedirler. Bu çalışmanın amacı henüz ülkemizde uygulama alanı olmayan Asya opsiyon sözleşmelerinin diğer opsiyon türlerinden farkını ortaya koymak, Asya opsiyon sözleşmelerinde ortaya çıkan kar veya zararların hesaplanma biçimini anlatarak standartlara göre nasıl muhasebeleştirileceklerine ilişkin öneriler sunmaktır. Bu doğrultuda çalışmada hisse senedi, ham petrol, altın, döviz kuru, kahve üzerine satın alınan Asya ortalama fiyat alım ve satım opsiyon sözleşmelerine ilişkin örnek uygulamalara yer verilmiştir. Asya ortalama fiyat alım ve satım opsiyonunun uygulamaya konulup konulmamasına ilişkin kar-zarar hesaplanarak muhasebe standartları kapsamında opsiyon alıcısı ve opsiyon satıcısının yapması gereken muhasebe kayıtları belirtilmiştir.

UFRS’DE STOK DEĞERLEME YÖNTEMİ SEÇİMİ: POZİTİF MUHASEBE TEORİSİ ÇERÇEVESİNDE AMPİRİK BİR ÇALIŞMA

This study aims to explore how firm-specific factors influence managers’ choice of inventory accounting methods under International Accounting Standards/International Financial Reporting Standards from a positive accounting theory perspective. A total of 921 companies from 11 different countries are included in the study for the year 2019. Multiple regression analysis is used to test the impact of explanatory variables on the choice of inventory accounting method. The results demonstrate that firm size and capital intensity influence the choice of FIFO negatively, which show that as firm size and capital intensity increases, companies’ tendency to select FIFO decreases, consistent with political-cost hypothesis.

Standards’ Compliance and Financial Reporting Quality Among Listed Companies in Nigeria

The study determined the extent of compliance with financial reporting standards and the extent of financial reporting quality among quoted non-financial firms in Nigeria between 2005 and 2020. The study used secondary data sourced from the published annual audited reports and financial statements of 50 non-financial firms listed in the Nigeria Stock Exchange. Descriptive statistics and Beneish Model were used to determine the compliance and the extent of financial reporting quality. The results showed that the level of compliance with financial reporting standard among quoted non-financial firms is significantly high. Also, results showed that since the adoption of International Financial Reporting Standards (IFRS) in 2012, the level of financial reporting quality of quoted non-financial firms has increased as there was no manipulation of any financial statement of the selected firms up to 2020. Keywords : Financial Reporting Quality, IFRS compliance, Beneish Model. DOI: 10.7176/RJFA/13-14-08 Publication date: August 31 st 2022

The modern correlation of RAS and IFRS systems of the public and non-public sectors

Currently, the process of reforming the Russian Accounting Standards (RAS) systems for organizations in both the state and nonstate sectors (or organizations in the budget and not budget spheres) is ongoing. At the same time, this process continues to be carried out taking into account the systems of International Financial Reporting and Accounting Standards for organizations of the public and non-public sectors (IFRS, IAS, IPSAS). Therefore, today it is relevant to determine the modern ratio of the RAS and International Standards systems of the state (public) sector, as well as the RAS and International Standards systems of the non-state (non-public) sector. In addition, a comparative analysis of the systems of domestic accounting standards of organizations in the state and non-state sectors makes it possible to identify possible future changes in these systems. Indeed, in general, the accounting methodology for these organizations (including healthcare organizations in these sectors) should be unified. As a result, any innovation in the accounting of one of the above sectors may indicate the feasibility and possibility of making similar adjustments to the accounting of another of these sectors. For similar reasons, it is relevant to determine the current relationship between public and non-public sector International Standards systems. A comparative analysis of all these systems (including for healthcare organizations of the above sectors) is carried out in this article. Grouping method, comparison, analogy method, analysis and synthesis, systematic approach, logical approach were used as research methods. As a result of the research, the article presents proposals for the further development of the RAS and International Standards systems of the state/public and non-state/non-public sectors (including for healthcare organizations).

How does the IFRS adoption affect systematic versus idiosyncratic risks of French listed companies?

In this paper, we explore the impact of International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) adoption on the French listed firms’ pricing in terms of performance, systematic risk aversion, idiosyncratic and systematic risks from 2001 to 2008. Unlike previous studies, we adopt a risk decomposition into systematic and idiosyncratic components to study the IAS/IFRS adoption effect. A modified market model (MMM) is used to allow time-varying variance on the one hand, and parameters changing over periods on the other hand. Our findings show that IFRS adoption reduces idiosyncratic risk, leads to a vanish in systematic risk, increases the systematic risk aversion, and improves the speed of information adjustment. We underscore the role of IFRS in enhancing the stocks’ informational efficiency. Our results help investors in their investment decisions as well as accounting professionals and market makers in the design of relevant accounting and financial policies.

Falsified corporate financial statements

The article presents the results of a study of various tools and methods for detecting falsification of financial statements, and indirect signs of its distortion. Distortion of financial statements has a significant impact on the sustainable development of the company. In recent years, financial reporting fraud has become a significant problem, both for domestic companies and in world practice. In modern conditions, companies commit fraud with financial statements in such areas as the distortion of financial information in terms of size, liabilities, costs, assets. Nowadays, the importance of financial information and the requirements for transparency and integrity are increasing, which requires the identification of tools for detecting misstatements. The subject of the study is the tools for identifying and preventing the facts of falsification of financial statements. The information base was made up of International Financial Reporting and Auditing Standards, experience in implementing measures to assess the reliability of corporate financial statements in international and domestic practice.

The Effect of the Paycheck Protection Program and Financial Reporting Standards on Bank Risk-Taking

This paper examines the consequences of the paycheck protection program (PPP) for bank risk-taking and whether the shift to the current expected credit loss (CECL) model moderates this effect. We find that the extent of a bank’s PPP participation is associated with relatively greater changes in risk-taking outside of the PPP. We also show that this effect is concentrated in banks that have not early adopted the CECL model and banks with timelier pre-PPP loan loss provisions, suggesting that timelier loan loss recognition constrains risk-taking incentives. Overall, our findings provide insight into the indirect consequences of government stimulus programs administered through banks and the role of accounting in constraining bank risk-taking. This paper was accepted by Suraj Srinivasan, accounting.

IFRS implementation in Romania Certified Accountants perspective

Abstract This study aims to investigate the opinions of certified accountants in Romania on the implementation of the IAS/IFRS (International Accounting Standards/International Financial Reporting Standards) in an emergent country that has a short to medium experience in adopting and implementing the standards.

The Enactment and Critique of International Accounting Standard Two

Harmonising the International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) globally has been the objective of national boards that seek to eliminate existing differences. The harmonisation project has been substantially efficient in realising the IFRS in emerging economies. However, concerning the international accounting standard two, the existence of different inventory valuation methods in literature is one of the dilemmas confronting the application of IAS 2 in many nations globally. This study through a comprehensive literature review discusses and present a critique on the international accounting standard two to afford insight that will be beneficial to both scholar and standard setters. The findings reveal a formidable contribution of the current asset inventory on companies and compliance levels in South Africa. Furthermore, these findings supplement prevailing body knowledge on IAS two and the value relevance of accounting inventories. Highlighting key critiques on the IAS 2 prescriptions and application internationally and also revealing the standards own crucial flaws and strengths and on companies.
 
 Received: 6 May 2021 / Accepted: 23 August 2021 / Published: 5 November 2021

Accounting Harmonisation through IAS/IFRS and Internationalisation: Evidence from FDIs and Cross-Border M&A

The process of accounting harmonisation via International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) adoption is very widespread, and it is still involving a huge number of countries all over the world.Previous academic literature investigated the impact of this process from different perspectives, such as the quality of financial reports, the transparency of financial disclosures, the liquidity of the financial markets and the cost of equity.The aim of this article is to contribute to the research stream exploring the effects of IAS/IFRS adoption, investigating if accounting harmonisation through the IAS/IFRS has had an impact on the internationalisation process. To achieve our objective, two multiple linear regression analyses are presented. The first one focuses on the impact of the adoption of IAS/IFRS on foreign direct investments (FDIs) using data collected from a sample of 34 Organisation for Economic Co-Operation and Development (OECD) member countries. The second statistical analysis investigates the influence of IAS/IFRS adoption on cross-border mergers and acquisitions (M&A), considering operations carried out by European-listed companies towards target companies located in the 34 OECD member countries. The FDIs and cross-border M&A are considered proxies of the internationalisation process.Preliminary results show that the adoption of IAS/IFRS has positively affected FDI flows and increased the value of cross-border M&A.This study has tried to provide theoretical contributions to the literature stream about the effects of the harmonisation process with IAS/IFRS adoption, showing the beneficial impact they may have on the internationalisation process. Moreover, our findings can be useful for policymakers and managers, suggesting that becoming IAS/IFRS adopters can facilitate the internationalisation process of the companies.

The relationship between financial reporting standards and accounting irregularities: evidence from US banks

PurposeThe purpose of this paper is to explore whether the choice of International Financial Reporting Standards (IFRS) vs Generally Accepted Accounting Principles (GAAP) is associated with the frequency and likelihood of accounting irregularities and fraud in US banks.Design/methodology/approachThe authors examine the relationship between financial reporting standards and accounting irregularities in publicly listed US banks. Using a sample of 4,284 banks with accounting irregularities observed in the USA over the period of 1996–2014. They used logit model to estimate the likelihood of corporate misreporting having been committed in terms of accounting irregularities.FindingsThe authors show that banks that use US GAAP exhibit better operating performance than fraudulent banks that use IFRS except for certain variables. They also find that fraudulent banks are more likely to commit accounting irregularities when they have to follow IFRS and banks have relatively better bank performance.Practical implicationsOverall, the empirical findings result consistent with Kohlbeck and Warfield’s (2010) find that accounting standards are linked to fewer accounting irregularities.Originality/valueIn this study, accounting irregularities have a significant effect on bank performance during the Dodd–Frank period. It finds that banks that choose to use IFRS are more likely to have accounting irregularities and to engage in fraud.

IAS 41 Accounting For Agricultural Activities: Case of Turkey

Records of agricultural activities were not found in many countries' accounting records and accounts, like Turkey. The IAS organized by the International Accounting Standards Board has been translated from English to Turkish as a full set. Turkey Accounting Standards / Financial Reporting Standards have taken tehir names. This problem in accounting account plans and records was tried to be overcome with "TAS 41 Agricultural Activities" standard. Our study will make recommendations for the implementation and applicability of IAS 41 in Turkey. The recommendations will be prepared according to the accounting system implemented in Turkey will consist of accounting and records. In this context, the new accounts will be created in Uniform Chart of Accounts implemented in Turkey accounting system. Accounting records for the application of newly created accounts will be explained in a monograph. Our study will be described Turkey example of the International Accounting Standards. The accounting records are applied in other countries will be comparable with the accounting records in Turkey. With this study, there will be a contribution to the companies operating in the Agricultural Sector, a new perspective in the accounting records and uniform accounting practices in this field.

FINANCIAL ASSETS: RECOGNITION AND ACCOUNTING ACCORDING TO TAX PROCEDURE LAW AND FINANCIAL REPORTING STANDARD FOR LARGE AND MEDIUM-SIZED ENTITIES

Vergi Usul Kanunu (VUK), muhasebenin vergi çerçevesinde gelişmesine katkıda bulunmuştur. 2012 yılında yayımlanan yeni Türk Ticaret Kanunu ile birlikte muhasebenin salt vergi için değil, gerçeğe uygun, ihtiyaca uygun, karşılaştırılabilir bilgi üretmesine yönelik önemli adımlar atılmıştır. Bu adımlardan biri de bağımsız denetim yaptırma zorunluluğuna sahip olup tam set finansal raporlama standartlarını uygulamak zorunda olmayan büyük ve orta büyük işletmelerin finansal tabloları için geçerli olan finansal raporlama standardıdır. Büyük ve Orta Boy İşletmeler için Finansal Raporlama Standardı (BOBİ FRS) 01.01.2018 tarihi ve sonrasında başlayan hesap dönemlerinde uygulanmak üzere yürürlüğe girmiştir. Bu çalışmanın amacı, finansal varlıkların sınıflandırılmasını, ölçülmesini ve muhasebeleştirilmesini VUK ve BOBİ FRS’ye göre incelemek ve bunlar arasındaki farkları ve benzerlikleri belirlemektir. Bu amaç doğrultusunda ilk olarak finansal varlıklara ilişkin hükümler VUK ve BOBİ FRS’ye göre ayrı ayrı incelenmiş, daha sonra ise konu örnek olay çalışması yöntemine göre açıklanmıştır.

A Research On Undergraduate Accounting Students’ Interest Level, Expectation And Awareness Of TAS/TFRS: The Case Of Giresun University Business Administration Department

Araştırmada Giresun Üniversitesi İktisadi ve İdari Bilimler Fakültesi İşletme Bölümü öğrencilerinin TMS/TFRS hakkındaki ilgi düzeyi, beklenti ve farkındalıklarının ortaya konulması amaçlanmıştır. Araştırma sonucunda öğrencilerin cinsiyetleri ve öğretim programları ile TMS/TFRS ilgi düzeyi arasında anlamlı farklılık bulunmazken muhasebe ilgi düzeyleri, muhasebe meslek seçimi, TMS/TFRS dersini alma durumları ve TMS/TFRS ile ilgili derslerin bölümde zorunlu olarak verilmesini istemeleri ile TMS/TFRS ilgi düzeyi arası anlamlı farklılıklar olduğu tespit edilmiştir. Ayrıca öğrencilerin muhasebe ilgi düzeyi, muhasebe meslek seçimi, TMS/TFRS ile ilgili ders alma durumu ve dersin bölümde zorunlu olarak verilmesini istemeleri ile TMS/TFRS farkındalık düzeyi arasında anlamlı farklılık olduğu belirlenmiştir. Öğrencilerin beklentileri incelendiğinde ise çoğunluğun TMS/TFRS üzerine ayrı bir ders almadığı ve bu dersin zorunlu ders olarak verilmesini istediği söylenebilir.

Impact of Mandatory Application of International Accounting and Financial Reporting Standards on the Earnings Management Practices of Jordanian Corporations

Impact of Mandatory Application of International Accounting and Financial Reporting Standards on the Earnings Management Practices of Jordanian Corporations

The use of historical cost and fair value for property and plant and equipment measurement: Evidence from the Republic of Serbia

The aim of the paper is to reveal how financial statement preparers in the developing and transition country of the Republic of Serbia, behave in situations where they can choose between the valuation model based on historical cost and the valuation model based on fair value. In that regard, we have analysed the subsequent measurement of property and plant and equipment in Serbia. We find that companies are more likely to choose the historical cost model than the revaluation model (the model based on fair value) for owner-occupied properties and plant and equipment, and the fair value model rather than the historical cost model for investment properties. The willingness to use the revaluation model for subsequent measurement of owner-occupied properties and plant and equipment varies across different categories of companies, and we find a statistically significant relationship between that willingness and the legal form of the company. We also find that in the notes to their financial statements, a significant number of companies in Serbia do not disclose adequate information on the model used for subsequent measurement of property and plant and equipment, although such information is required by the applicable financial reporting standards.

Влияние отношений собственности на элементы корпоративного управления в российских компаниях

The article deals with the influence of ownership relations on the elements of corporate governance in modern Russian companies. The assessed parameters that help to reveal the rela-tion have been offered: shareholder influence, notice of a general meeting of shareholders, infor-mation in notifications, availability of general meetings of shareholders, proxy voting, financial re-porting standards, access to documentation, etc. The analysis of the specific features of corporate governance in the Russian public joint-stock companies on the basis of open sources of information has been carried out. The study was conducted using the GAMMA method developed by the rating agency Standard & Poor’s. The main results of the study showed that the greater the representation of minority shareholders and/or higher their activity, the more independent directors in the company, the higher the level of disclosure. If there is one large private shareholder in the company, he can also act as chairman of the board of directors. It is difficult to assess the impact of ownership relations on corporate governance in state-owned companies. If the company has a small number 
 of minority shareholders and their activity is low, transparency is limited only by disclosure 
 of mandatory information. It has been inferred that the peculiarities of relations between shareholders, as well as relations between shareholders and hired managers indirectly affect corporate governance’s elements. Models of the corporate control in the Russian Federation have been given (private enterprise model, managers' collective ownership model, concentrated ownership corporate control model, dispersed ownership corporate control model). More research is needed to identify 
 a more evident relation. The article has been written in the framework of the research work “De-velopment of property relations in a modern society”.

ECONOMIC AND LEGAL VIEW ON DEVELOPMENT OF INTANGIBLE ASSETS ACCOUNTING ON THE WAY TO NEO-ECONOMY

From the economic and legal point of view the author made generalization and formation of the view on the development of the national accounting of intangible assets (IA) under the influence of changes in the European Union as a condition for advancement to the neo-economy. It is considered essentially the national standard — Provision (Standard) of Accounting 8 «Intangible assets» in comparison with the analogous international accounting standard of IAS 38 «Intangible assets». It is noted that, in contrast to the domestic standard, IAS 38 describes the procedure for analyzing compliance of IA with the criteria of an asset as an intangible resource. It is taken into account that in the course of the operation of the IA the enterprise may incur costs: related to the improvement (modernization) of such assets; aimed at supporting the IA facility in a serviceable condition.It is stated that an asset is identifiable if it: (a) can be separated, that is, it can be separated or separated from the entity and sold, transferred, licensed, leased or exchanged individually or in conjunction with a related contract, an identified asset or liability, whether or not the entity intends to do so, or b) arises as a result of contractual or other legal rights, whether or not they may be transferred or separated from the entity or from other rights and obligations. It is stated that an entity controls the asset if it is empowered to obtain future economic benefits coming from the primary resource and restrict others from accessing those benefits.It is noted that the use of intellectual property rights in the production process may reduce future production costs rather than increase future revenues. The ability of an entity to control the future economic benefits of IA is largely based on the legal rights that can be assured through litigation. Legislative requirements have been createdto align Ukrainian accounting standards with EU law and update the procedure for applying the International Financial Reporting System, which is also related to IA, especially for large companies. The introduction of digital finances and digital accounting can make significant changes. The applying of International Financial ReportingStandards in European countries supports to ensure compliance with the rules of national legislation of Ukraine in the field of accounting.

The systematic approach to metering and its automation in enterprises with alternative energy sources

Introduction. The amount of energy resources generated from the introduction of alternative energy is increasing every year, nevertheless this problem is increasingly being researched by scientists, economists and ordinary people seeking to improve the environment around the world. This is a very pressing issue for European countries. As a potential member of the European Union, Ukraine also intends to significantly increase its energy resources from alternative energy. The Verkhovna Rada of Ukraine has been acting in the same direction since 2003 when the Law of Ukraine «On Alternative Energy» was adopted and has constantly been amending them, the last of which is dated July 11th, 2019 [1]. However, accounting for alternative energy is a new topic of research, therefore it requires a systematic approach to the formation of accounting policies; a number of interconnected accounts of the Charts of Accounts of assets, capital, liabilities and business operations of enterprises and organizations; and application of appropriate software.Analysis of recent research and publications. Problems of alternative energy development were considered in the works of Ishchuk L., Kinash I., Lishchuk V., Lishchuk M., Moskovchuk A., Nikolaeva A., Pyrih S. and accounting and analysis are investigated in the works of Derii V. A., Zadorozhnyi Z.-M. V., Krupka Ya. D. However, the accounting aspects weren’t considered in detail, thus, in this regard, the topic of our study is relevant. The purpose of the study is to formulate a systematic approach to accounting and its automation in alternative energy enterprises in order to develop proposals for improving the efficiency of their activities.Methods. The article uses general scientific and specific research methods to study the systematic approach to accounting and its computerization in alternative energy enterprises. A situational analysis of alternative energy development is carried out. The graphical method was used to reflect the ratio of energy from the sun, biomass, wind (in percentage terms) for ten years in Ukraine. Topical problems of energy in Ukraine and in the world through the use of induction and deduction methods are revealed. The modeling method for the formation of the accounting system in small enterprises of alternative energy production has been applied.Results. A systematic approach to accounting for alternative energy is very important as it’s a significant segment in the set of activities. The Law of Ukraine “On Alternative Energy” and International Standards or National Accounting Standards and Financial Reporting Standards do not refer the specificities of accounting and reporting on energy receipts from alternative energy sources. In this regard, we propose in the Law of Ukraine “On Alternative Sources” to separate the section for accounting and reporting, as it is done in Article 26 of the Law of Ukraine “On the Electricity Market” [2]. In our opinion, in the Chart of Accounting it is advisable to replace the name of the sub-account 203 «Fuel» with the name «Natural and energy resources» with the corresponding analytical accounts 2031 «Cold water», 2032 «Hot water», 2033 «Electricity of own production», 2034 «Electricity purchased» , 2035 “Natural gas purchased”, 2036 “Biofuels”, and 2037 “Other renewable natural and energy resources” [3].In addition, we believe that the government should encourage the development of small businesses, consulting and design services that would provide individual homeowners with the opportunity to equip themselves with alternative energy facilities. In this regard, it is necessary to develop an optimal model of accounting system for small alternative energy enterprises. In the segment of accounting and reporting automation, we propose companies to search for new software that will replace the Russian software “1 C Accounting”, because this software requires additional modules. In addition, this software is very risky due to the political situation in Ukraine. Hence, we believe that it is necessary to give priority to the improvement of domestic software.Prospects. Further scientific research can be developed to detail the features of accounting, reporting and control in small alternative energy enterprises. The level of readiness for the use of Ukrainian accounting and reporting software products, in particular in the alternative energy segment, as well as the formation of a unified network with the bank and investors, should be discovered.

Financial Reporting Standards Legal nature and rules for their interpretation in Colombia

Financial Reporting Standards (FRS) are generally analyzed from the accounting, economic and financial perspective; this paper seeks to contribute to their understanding from the legal perspective. The objectives hereof are, first, to establish the legal nature of Act 1314 of 2009 from the theory of law, taking into account that decrees incorporate into the legal system the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS) an approximation to its structure, in addition, to making explicit rules for interpretation applicable in Colombia. The second objective is to analyze in a simple random sample of concepts issued by the Consejo Técnico de la Contaduría Pública (CTCP per its acronym in Spanish-Technical Council of Public Accounts-), during the period 2013-2018, whether the rules of interpretation have been considered, to identify if there are normative gaps, conflict among rules or between rules and principles. The results allowed us to infer that: (a) the grammatical method prevails, (b) there are few cases formulated by absence or normative conflict, and (c) the presence of a principled model is not yet perceived by the structure of queries and concepts.