Future Receipts Research Articles

МЕТОДОЛОГИЧЕСКИЕ ПОДХОДЫ К ПРОГНОЗИРОВАНИЮ ЛЕСНОГО ДОХОДА ПРИ СТРАТЕГИЧЕСКОМ ПЛАНИРОВАНИИ

The paper considers methodological approaches to planning and forecasting payments for the use of forests in the budget system of the Russian Federation. According to the results of scientific research, it has been established that the currently used approach to planning income receipts to the state budget is based on the use of the achieved level of received forest payments for a three-year retrospective period and its indexation to the planned values of the consumer price index in accordance with the forecast of socio-economic development of the country. It is noted that this approach can be applied to planning future receipts of forest payments in the short term: for 1-3 years of planning. At the same time, for medium- and long-term forecasting (3-10 years), a more detailed approach is required, taking into account the contractual obligations of persons using forests of a long-term nature. In addition, it is proposed to use a corrective risk factor for termination of contracts when forecasting forest revenue receipts to the budget system of the Russian Federation. The proposed approach will improve the quality and accuracy of medium- and long-term forecasting of forest income.

Assessing Fiscal Sustainability

Every country faces an intertemporal budget constraint, which requires that its government's future expenditures, including servicing its outstanding official debt, be covered by its government's future receipts when measured in present value. The present value difference between a country's future expenditures and its future receipts is its fiscal gap. The US fiscal gap now stands at $205 trillion. This is 10.3 percent of the estimated present value of all future US GDP. The United States needs to raise taxes, cut spending, or engage in a combination of these policies by an amount equal to 10.3 percent of annual GDP to close its fiscal gap. Closing the gap via raising taxes would require an immediate and permanent 57 percent increase in all federal taxes. Closing the gap via spending cuts (apart from servicing official debt) would require an immediate and permanent 37 percent reduction in spending. This grave picture of America's fiscal position effectively constitutes a declaration of bankruptcy.

United States Budget Deficit: Considerations for a Social Security Reform

This article analyses United States deficit and Social Security as the sole largest program of U.S. government. Forecast of future spending, receipts, and national debt exposes the necessity for a serious system change within domestic social security net. In particular, Social Security and retirement system of the United States is jeopardized in the nearest future because of the growing population of retirees-baby boomers. The article proves Social Security's contribution to U.S. public debt, arguing that Social Security’s future deficit must not be omitted. The article argues that the current employment rates that provide tax for Social Security cannot back it up putting both younger generation and retirees in a vulnerable position. Thus, the sustainability of Social Security must be restored based on more proper projection tools available nowadays.

Use of Supplemental Nutritional Assistance Program Benefits by Unemployment Insurance Applicants in Michigan during the Great Recession

During the Great Recession, both the Supplementary Nutrition Assistance Program (SNAP) and the federal-state unemployment insurance (UI) program experienced dramatic increases in participation. Using Michigan program administrative data on all SNAP (2006-2011) recipients and all UI (2001-2010) applicants, we examine SNAP use before and after UI application. Both past and future receipts of SNAP are highly negatively correlated with meeting UI income and job separation eligibility requirements. Unemployment insurance applicants with insufficient wage credits or job separations because of quitting or employer discharge are much more likely to have received SNAP in the past. Furthermore, such UI applicants are also more likely to receive SNAP soon after applying for UI benefits. The data also indicate that as of the start of the Great Recession, UI applicants who received SNAP subsequent to UI filing began receiving those benefits sooner compared with UI applicants prior to the downturn. The models also suggest that SNAP receipt after UI application was higher among ineligible UI applicants, applicants who quit or were fired from prior jobs, those with prior recent SNAP receipt, prime age workers, females, those with education of less than a high school diploma, those having three to five years’ prior job tenure, and those with a separating job in retail trade, health care, or hospitality.

Auditor Fees and Auditor Independence: Evidence from Going Concern Reporting Decisions

In this study we examine the association between audit service fees and non-audit service (NAS) fees and the auditor’s final decision regarding the type of opinion to render to a financially distressed client. Along with examining current fee levels and reporting decisions we also test the DeAngelo (1981) auditor independence model by examining the association between future fee receipts and current reporting decisions. Using data from the post-SOX reporting period of 2004-2006 and a stringent control sample, we find that the magnitude of NAS fees received in the current year is negatively related to the likelihood of the auditor modifying the audit opinion for going-concern uncertainty. We also find that current going-concern modification decisions are negatively related to total fees received by auditors in subsequent years. Our findings suggest that concerns over the relation between auditor fees and the possible impairment of auditor independence, as reflected in going-concern modification decisions, are supported in the more recent years for highly distressed clients.

Uncertainty and the yield curve

This paper proposes a logistic model for the pricing of future receipts due from government bonds. The model is derived from the assumption that uncertainty about valuations increases the further forward the receipt is scheduled. The entropy of a probability distribution is used as the measure of uncertainty. The model leads to yield curves typically within 5 basis points of the Bank of England's at the long end. At the short end, the results suggest that REPO market data is inconsistent gilts market data.

Expectations, Capital Gains, and Income

A theoretical framework for the measurement of income under uncertainty is developed that addresses some long‐standing controversies about the treatment of capital gains. The consequences for economic analysis and policy making are potentially serious, because the treatment of capital gains can significantly affect some major macroeconomic aggregates, including national income and savings, balance of payments deficits, government deficits, and depreciation. (JEL O47, P44, Q32)

Presenting Discounted Future Cash Receipts and Payments in Financial Statements

This article is about the commonly asserted view that present value, the discounted amount of future cash receipts and payments, is an attribute of assets and that it ideally should replace acquisition cost as the attribute of assets to present in financial statements. The view is based on faulty extrapolation from economics and the study of finance. Use of present value in connection with the preparation of financial statements does not contribute to performing their basic function, which is to report relevant real world conditions as they exist and existed and relevant financial effects of relevant real world events as they occurred. The view turns discounting into a magical process, it reverses the chronological order of cause and effect, and it unjustifiably substitutes the financial effects of supposed future events for the financial effects of historical events as the raw material of financial statements. The future does not yet exist and such financial events have not yet occurred; the present condition therefore can in no way depend on them. The discounted amount of future cash receipts and payments is not an attribute of assets and it should therefore not replace acquisition cost as the attribute of assets to present in financial statements.

Infrastructures publiques et financement privé : le paradoxe de la rentabilité financière

Public infrastructures and private financing : the paradox of financial profitability The rationality of the decision to invest, is initially pointed out, according to whether it concerns the private sphere or the public sphere according to that it is based on an evaluation in terms of financial profitability or in terms of socio-economic profitability. One investment considered profitable from the viewpoint of public rationality, may be entrusted, for its realization as for its exploitation, to a private operator. In this case, the balance must be made between the advantages which can be obtained from the relative effectiveness of the private company and the public contribution required by the financial balance of the operation. A project, which has an insufficient financial profitability to be guaranteed on the only future receipts, asks an extra public financing which must carry effective profitability on an acceptable level for the operator. However, all equal things in addition, the requirements for effective profitability, and thus the public contribution required, are legitimately higher for a private company which is not leaned on public resources in the event of failure. It is because things are not necessarily equal in addition that the private operator can, however, release a higher social surplus. It remains that, on the basis of a financial simulation of an academic case, it is shown that the need for public financing is very sensitive to weak variations between profitability suitable for the operation and profitability guaranteed to the operator. That leads to this « financial profitability paradox » which suggests us that the recourse to the public sector is more suitable when this variation is reduced, but that the private operator can be attractive for operations of low profitability.

Intra-Year Discounting Made Easy: A Comment

Abstract No abstract available.

The effect of increased variance on the duration of search: A note

A search procedure with a finite number of possible periods of search is considered here. It is assumed that the offers at different periods are independent of each other, that there are no search costs, and that there is no discounting of future receipts. It is shown that if the offers come from a normal population with the same mean then the expected duration of the search, given that an optimal search procedure is followed, is independent of the variance.

Uncertain Lifetime, Imperfect Insurance Markets and the Valuation of Pension Wealth

In most of the developed countries provision is now made, by either the state or a private institution, for individuals to provide for themselves a retirement income which is a return on the accumulated value of regular payments made during the working life. Given that for many individuals the discounted present value of expected pension rights is one of the most important components of personal wealth it would seem desirable to include an estimate of the former in any measure of the latter. This will require the discounting of anticipated future payments and receipts at an appropriate rate. In the absence of uncertainty and with perfect capital markets anticipated future payments and receipts would be discounted at the prevailing rate of interest on financial assets. Where the individual's lifetime is of uncertain length but there exist perfect insurance markets of the type considered by Yaari (1965) the appropriate rate of discount would be the actuarially fair rate of interest prevailing on insurance notes. Now whilst the individual is uncertain as to how long he will live it is not the case that individuals are observed trading in actuarially fair insurance notes as suggested by the Yaari model. The aim of this paper is to try and obtain some insight into the appropriate rate of discount to be used in the valuation of pension wealth when insurance markets are less perfect than those described by Yaari.

Short-term financial planning with uncertain receipts and disbursements

The problem of short-term financial planning is to determine an optimal credit mix to meet the short-term cash needs and an optimal investment plan for excess cash. A number of linear optimization models have been developed to solve this problem, some of which are in practical use. The purpose of this paper is to generalize the assumptions of these models concerning the available information about future receipts and disbursements. It is presupposed that the financial officer has some idea as to the amount involved which, however, cannot be specified by a probability distribution. On the contrary, we assume that these ideas only permit qualitative probability statements such as the following: “That the difference between disbursements and receipts in a certain period lies in an interval I 1 is no less probable than that it lies in an interval I 2”. For this level of information we formulate a model for short-term financial planning, and we develop a solution procedure to determine the optimum financial alternatives. Finally, the entire procedure is demonstrated by a medium sized example.

English Government Borrowing, 1660-1688

Borrowing was a necessary and important part of government finance during the period from 1660 to 1688. During Charles II's reign, over twelve per cent of the government's receipts were loans paid directly into the Exchequer and, during some years, loans made up as much as one-third of the total receipts. Clearly borrowing was essential. Anticipatory borrowing, for instance, was necessitated by the very nature of government finance. With the exception of the scheduled payments made by private tax collectors, tax revenues were received by the government irregularly during the course of a year. In addition, the government's expenditure was not easily apportioned over the entire year; in most cases, large lump sums were required, and consequently it was necessary for the government to anticipate future revenue receipts by borrowing in order to meet its current expenditure obligations. Of course the government could have solved this problem by accumulating surplus revenue and using it as reserve from which large payments could be made without recourse to borrowing. But during Charles II's reign, the demands on the revenue were generally larger than the income.Before 1688, in most cases the only guarantee a potential creditor of the government had that the loan would be repaid on time, if at all, was the vague security of the king's word. This was largely the result of the constitutional status of government finance. When Charles II was restored to the throne in 1660, there were no major changes in the constitutional status of government finance.

The Demand for Money and the Determination of the Rate of Interest under Uncertainty

THE UNCERTAINTY OP THE FUTURE is unquestionably one of the principal motives which induces individuals to hold money balances. One of its first appearances in theoretical discussions was in Keynes' General Theory [6] which attributes the precautionary motive for holding cash to the uncertainty in the timing of future income receipts and expenditure plans. More recently, a number of other writers [10, 19] have shown that uncertainty about the future rate of interest is also likely to influence the demand for money.l The objective of this paper is two-fold. The first aim is to develop a theoretical model which describes the demand for money under the following two types of uncertainty:

Measuring the Permanent Income of a Household: An Experiment in Methodology

A common method of estimating permanent income is to classify households into groups and then take the average income as an estimate. This has two weaknesses: (1) no account is taken of expected future receipts, and (2) households in the same group may have different permanent incomes because of differences in factors other than those used in forming the groups. The present study suggests a method of correcting for these defects by using a two-stage procedure. Empirical results indicate that irrespective of the choice of variables used to group households, the method suggested yields better results than the common method of using the mean values.

Investment and Financing Decisions on Goal Formulation and Model Building.

To some readers it may seem a little suspect that we focus our study on the firm’s formulations of its goal function. It is not uncommonly felt that the professional contribution of the advisory economist should be restricted to investigating the consequences of different acts in a decision situation. Naturally even such limited tasks have to be related to the goals applicable in the relevant situation, but it could be claimed that the decision-maker should be solely responsible for precisely formulating his goals, thus furnishing the starting-point for the economist’s work. Obviously advice will be impossible unless the decision-maker broadly outlines his goal(s) and relevant courses of action. The task of the economist (the advisor) will then be to substitute for such a broad description a formal decision model which the decion-maker can accept. And in accepting the model as a whole, he naturally accepts too the goal function embodied in it. This necessary acceptance does not prevent the economist from playing just as active a role in the detailed formulation of the goals as in the specification of acts and the precise description of the various outcomes. The close relation between these elements in the model provides confirmation of this. The class of decision models that we shall discuss are deterministic (i.e. they contain no stochastic variables) and concern the firm’s choice between different investment and financing alternatives. A considerable amount of literature on this subject already exists and it seems important even at this early stage to point out in a general way how the present work fits into the picture. It may be said that a well established investment theory exists only for the special case of the firm functioning in a perfect capital market. In such a market all the participants agree in a definite conception of the investment opportunities and their consequences. The firm can therefor borrow on the various investments up to the discounted value of the future net receipts. The rate of interest is the same for borrowing and lending for all firms and persons on the market. It is also normally regarded as constant over time. There are no transaction costs. Under these circumstances writers are unanimous in declaring that when an economically rational decision-maker evaluates the investments open to him, he should rank them according to their present value at the market rate of interest. What, then, can be said about firms working in a capital market with credit restrictions, different rates of interest, taxes and other market imperfections? How are they to formulate their goals? It is our view that statements so far to be found in the literature are generally based on the rather loose analogies with the case of the perfect capital market. Our aim here is to develop two reasonable analogies somewhat more fully than has been usual before. Contents . CHAPTER 1 . INTRODUCTION1.1 The Aim and the Frame of Reference of the Study1.2 Goal Formulation and Model-Building in Investment Theory.1.3 Courses of Action and their Outcomes.1.4 Basic Assumptions concerning the Firm's Goal Formulation.1.5 Goal Formulation in this Study and in Welfare Economics. CHAPTER 2 . THE FIRM’S TRANSFORMATION OPPORTUNITIES AS THE BASIS FOR THE APPLICABILITY OF CERTAIN GOAL FUNCTIONS IN THE EVALUATION OF INVESTMENT AND FINANCING ACTIVITIES. 2.1 The Applicability of the Present Value Approach to Investment and Financing Evaluations. 2.2 The Applicabilityof the Internal Rate of Return Approach to Investment and Financing Evaluations. 2.3 The Applicability of the Payoff Approach to the Evaluation of Single Investment Projects. 2.4 Summary. Some Comments on Our Conclusions. 2.5 Our Study in the Light of Some Developments in Investment Theory. CHAPTER 3 . THE STOCK MARKET AS THE BASIS FOR THE APPLICABILITY OF CERTAIN GOAL FUNCTIONS IN THE FIRM’S EVALUATION OF INVESTMENT AND FINANCING ACTIVITIES. 3.1 A Simple Model of the Market Value of Stock. 3.2 The Owners’ Tax Conditions and the Importance of the Stock Market for the Choice of Goal Function in Corporations Listed on the Stock Exchange. 3.3 Some Comments on the Effect of Transaction Costs and Different Interest Rates on the Choice of Goal Function in Corporations Listed on the Stock Exchange. 3.4 Some Comments on the Importance of the Stock Market for the Choice of Goal Function in Firms not Listed on the Stock Exchange. 3.5 Comments on Some Literature Concerning the Stock Market and the Corporation’s Investment and Financing Activities