Hidden Liabilities Research Articles

Impact of informal assets and informal liabilities on the determined market value of a company (case study of a transport company)

Research Objectives. This article examines the impact of informal assets and informal liabilities held by a company on the determinable value of the business. Methodology and research. As part of the study of the process of identifying and accounting for informal assets and liabilities in the valuation of the company the works on valuation activities, as well as an analysis of regulatory and legal sources were studied. The authors considered the regulatory framework of the concept of "asset" and "liability" and analysed the possibility of accounting in the valuation activities (and other analytical procedures) of informal assets and liabilities, i.e. economic benefits and obligations that do not have all the formal qualifying characteristics (according to accounting rules). Hidden, imaginary and probable assets as well as economic analogues of assets are considered as part of informal assets. The authors considered the specifics of accounting and valuation of assets, the alienation of which from the organisation is impossible or unlikely. Hidden, imaginary and probable liabilities as well as economic analogues of liabilities are considered as part of informal liabilities. In order to present the results of the study more fully and clearly, the authors considered aspects of the impact of informal assets and informal liabilities on the example of a transport company (carriage of goods and passengers). Results. As a result of the analysis, the article shows that there are assets which are not recorded in the accounting records, but which ultimately affect the value of the company. Such assets cannot be recorded and reported in the accounting (financial) statements because they do not qualify (hidden assets). At the same time, assets may be recorded that are not justified there due to an error or because the assets have lost their qualifying characteristics. These assets are defined by the authors as being imaginary. There are liabilities that have not been recognised in the accounting records, but which affect the value of the company. Such liabilities cannot be entered in the accounting records and recognised in the financial statements because they do not meet the qualification requirements (hidden liabilities). Liabilities may be recognised in accounting that are not reasonably recognised there due to an error or due to the loss of qualifying characteristics of the liability (imaginary liabilities). It is also appropriate, from a financial point of view, to include liabilities equated to equity as imaginary liabilities. In the course of the study, the authors considered the impact of informal assets and informal liabilities on the determined value of a transport company. The authors propose scientific and methodological principles for identifying, classifying and valuing informal assets and liabilities.

Commingled Fluids in Abandoned Boreholes: Proximity Analysis of a Hidden Liability.

The interactions between old abandoned wellbores of suspect well integrity with hydraulic fracturing (HF), enhanced oil recovery (EOR), or salt water disposal (SWD) operations can result in upward leakage of deep aqueous liquids into overlying aquifers. This potential for upward fluid migration is largely unquantified as monitoring abandoned wells is rarely done, and leakage may go unnoticed especially when in deeper aquifers. This study performs a proximity analysis between old abandoned wells and HF, EOR, and SWD wells, and identifies commingled old abandoned wellbores, which are those wells where groundwater may flow from one aquifer to one or more other aquifers, to identify the locations with the greatest potential for upward aqueous fluid migration at three study sites in the Western Canadian Sedimentary Basin. Our analysis indicates that at all three study sites there are several locations where HF, EOR, or SWD operations are located in close proximity to a given old abandoned well. Much of this overlap occurs in formations above typically produced hydrocarbon reservoirs but below exploited potable aquifers, otherwise known as the intermediate zone, which is often connected between abandonment plugs in old abandoned wells. Information on the intermediate zone is often lacking, and this study suggests that unanticipated alterations to groundwater flow systems within the intermediate zone may be occurring. Results indicate the need for more field-based research on the intermediate zone.

Corporate Environmental Impact: Measurement, Data and Information

As an organization’s environmental impact has become a central societal consideration, thereby affecting industry and organizational competitiveness, interest in measuring and analyzing environmental impact has increased. We develop a methodology to derive comparable and scalable monetized environmental impact estimates by applying characterization pathways and monetization factors to organization level environmental outputs, including carbon emissions, water use, and other emission types. The median environmental impact as a percentage of an organization’s sales (operating income), referred to as environmental intensity, is 2% (22%) suggesting a significant level of ‘hidden liabilities’ and potential for value erosion if environmental impacts are priced. About 60% of the variation in environmental intensity is driven by industry membership, while the rest can be attributed to firm specific factors or to country and more granular industry classifications. Environmental intensity exhibits moderate correlation with various environmental ratings across firms and industries and no correlation across firms within industries. Firms with higher environmental intensity exhibit lower corporate market valuation, consistent with investors viewing environmental impacts as financially material and pricing them in some but not all industries. We document the dynamic materiality of environmental intensity, where the relation between environmental intensity and corporation valuation has become stronger in recent years.

Factors Affecting Effective Mergers and Acquisition: An Empirical Investigation

For many years, organizations looking to grow, capture more market share or improve their competitive advantages looks to mergers and acquisitions (M&A) as strategic tools. Pre-deal analysis and due diligence stand out as essential components of an effective M&A strategy. It is possible to spot potential risks and value drivers by thoroughly analyzing financial statements, operational synergies, cultural fit, and market dynamics. Inadequate due diligence might result in unforeseen difficulties, such as hidden liabilities or clashing cultures, which impede post-merger integration. Planning for integration and effective communication is equally important. Clear communication strategies manage stakeholder expectations both internally and externally while promoting transparency. Furthermore, establishing synergies and reducing disruptions requires thorough integration planning that takes organizational structure, systems, processes, and human resources into account. Third, leadership and cultural compatibility have a big impact on post-M&A integration. Strong leadership and a common vision facilitate the alignment of strategic goals and employee motivation. If not properly resolved, cultural differences between merging businesses might obstruct integration attempts and reduce the intended benefits.

Hidden liabilities in leases could result in high costs for your clinic

Any business wanting to take on leased premises needs to invest time and money in seeking out good legal advice. Lease contracts can occasionally be riddled with clauses that are written to benefit the landlord and not the tenant, and they can be very hard to escape from without cost. Adam Bernstein covers key considerations for business owners who are or will be taking on this type of building

Contingent liabilities or hidden liabilities? A review of disclosures

This article aims to analyze information on contingent liabilities in the financial statements of selected listed companies. It forms part of the discussion on the principle of materiality, which recommends equivalence of the numerical part and notes to the financial statements. The study shows that the achievement of this equivalence is difficult, if at all possible. Contingent liabilities are not a popular research area. It is possible that this article may contribute to filling this gap.

From poverty to prosperity: intangible assets, hidden liabilities and the lasting triumph over scarcity

Acknowledgments Chapter 1: An Introduction to Economics 2.0 Chapter 2: Economics 2.0 in Practice Interview with Robert Fogel Interview with Robert Solow Chapter 3: From the Meadow to the Food Court Interview with Paul Romer Interview with Joel Mokyr Chapter 4: Bugs in the Software Layer Interview with Douglass North Interview with William Easterly Chapter 5: The Heart That Pumps Innovation Interview with Edmund Phelps Interview with Amar Bhide Chapter 6: Financial Intermediation Chapter 7: Adaptive Efficiency and the Role of Government Interview with William Lewis Chapter 8: Challenges for the Future Interview with William Baumol Notes Index

FASB’s Quick Fix for Pension Accounting Is Only First Step

Hidden liabilities, understated expenses, and discretionary management assumptions make pension accounting controversial. Previous accounting standards allowed companies with underfunded pension plans to accumulate pension liabilities off the balance sheet while frequently reporting a net pension asset on the balance sheet. A new standard improves transparency by requiring that the pension’s funded status be reported on the balance sheet. In assessing the impact of the new standard, this study finds that it creates profound reductions in owners’ equity for many U.S.-listed companies. Pension cost smoothing and three primary pension assumptions—the expected rate of return on plan assets, discount rate, and expected rate of increase in employee compensation—continue to be controversial.

HIDDEN PUBLIC EXPENDITURES AND THE ECONOMY IN IRAN

Fiscal accounts are meant to show how much and where the government spends public funds or commits a country's resources to future payments. Information from government accounts is essential for evaluating government policies and programs in terms of their contribution to addressing social and economic needs and their impact on macro-economic performance. But there is a common problem in published fiscal data that must be addressed before they can be put to use: governments typically have some expenditures and debts that are not reflected in their official accounts. The extent of concealment varies across countries and activities, and the users of fiscal information need to be sensitive to the causes and consequences of such variation. Middle Eastern countries have their own share of hidden spending and liability, and some—such as Iran, Turkey, Morocco, Syria, and the Persian Gulf countries—stand out among nations in the scope and size of fiscal activities that they keep off their budgets. In this paper, we examine the case of Iran, where huge public funds are appropriated and redistributed outside the formal budget. The case is instructive because it shows the wide range and size of hidden government expenditures and commitments that affect the public. It also displays the dire consequences that lack of proper government accounting and reporting can bring to a country.

Caveat Aestimaton Evaluating Hidden Liabilities and Risks

Caveat Aestimaton Evaluating Hidden Liabilities and Risks

Size of the Public Sector, Contingent Liabilities, and Structural and Cyclical Deficits in the Czech Republic, 1993-1999

Two specialists on fiscal policy in the Czech Republic examine the deterioration of that country's fiscal position during the late 1990s and outline its causes and consequences. Particular attention is devoted to developments in the government sector, extra-budgetary activities, sources of revenue, patterns of government spending, hidden liabilities, and structural and cyclical fiscal imbalances. The authors also assess in some detail the political environment within which fiscal policy is formulated and describe possible outcomes should the current situation and policies continue. Journal of Economic Literature, Classification Numbers: E50, E60, H50, H60. 7 figures, 13 tables, 21 references.

Knowledge-based decision support by CRITIC

A knowledge-based diagnostic model which helps decisionmakers learn about hidden liabilities in their plan scenarios is developed in this paper. It offers critical opinions on plan deficiencies that may otherwise remain undetected. Decisionmakers preserve the freedom to explore solutions and retain the authority of making adjustments. This approach to human–computer interface design contributes to a more advanced domain-specific decision support system.

Underground storage tanks: managing the hidden liability exposure.

Underground storage tanks: managing the hidden liability exposure.

HIGH NOON FOR THE RISING SUN

Hidden liabilities, now coming to light, are putting a different spin on Japan's reputation as an arrogant competitor and forcing a painful structural transformation.

It's Not Business as Usual Anymore

Distinguished Author Series articles are general, descriptive representations that summarize the state of the art in an area of technology by describing recent developments for readers who are not specialists in the topics discussed. Written by individuals recognized as experts in the area, these articles provide key references to more definitive work and present specific details only to illustrate the technology. Purpose: to inform the general readership of recent advances in various areas of petroleum engineering. Summary In 20 years, a complex body of environmental laws, regulations, and decisions has been established in the U.S. Basic knowledge of environmental laws, regulations, and management techniques is now necessary for design, construction, and operation of oilfield facilities. Environmental permits are on the critical path and could significantly affect project viability or the cost path and could significantly affect project viability or the cost of doing business. In California and many other states, resource development projects face complex and voluminous environmental regulations. Because of these permitting obstacles and the competition for the available permits, early environmental planning is necessary if a project is to be successful and if costs and future liabilities are to be minimized. This paper reviews eight federal environmental laws, significant events that affect our daily business, and the reasons why environmental management must be integrated in our" business as usual" work decisions to minimize future (hidden) liabilities. Introduction Line managers and operating personnel are responsible for environmental protection in a company's operations. To carry out this responsibility effectively, these personnel must have a good working knowledge of all environmental laws, regulations, and policies that apply to their activities. Eight federal laws may policies that apply to their activities. Eight federal laws may affect our daily oilfield operations in the U.S. Most of these laws provide civil and criminal penalties for noncompliance. If you ignore the law, you risk personal fines and possibly a prison term. Therefore, what you don't know will most possibly a prison term. Therefore, what you don't know will most likely end up hurting you and your company. This paper discusses several examples of the possible monetary consequences when a cleanup remedy is imposed by outside parties. Any waste generation or discharge of contaminants into the environment has the potential for future liability. Environmental management programs reduce the potential for undesirable surprises and minimize this hidden liability. These environmental programs consist of assessments, waste minimization, recordkeeping, documentation, and up-to-date training. These programs are briefly reviewed. The assessment program will help ensure that personnel at each operating facility know and are meeting their obligations and responsibilities under the law. If you are responsible for environmental protection, it is in everyone'sinterest for you to do a good job. Important Environmental Statutes Most corporations' environmental policies charge line managers with the responsibility for environmental performance of their activities. The policies also state that every employee is expected to carry out the spirit and the letter of these policies. Knowledge of environmental laws and regulations is necessary for line managers and engineers who control the operations and installations. In some cases, state requirements can be even more restrictive than federal regulations.

How Many Hours?

In July 1989 the New York State Department of Health enacted regulations that limited hours worked by residents, increased supervision by attending staff, and augmented ancillary services. The plan, proposed by the Bell Commission, has radically transformed postgraduate medical education by paring down the work week to eighty hours and by restricting shifts to twenty-four hours. The state believed that improved supervision and shortened hours would improve patient care, foster medical education, and reduce resident fatigue and stress. Prompted by developments in New York, state legislators and policy-makers across the country are reexamining the grueling schedules traditionally worked by physicians in training. Although New York is still the only state with mandated restrictions, Iowa, Massachusetts, Michigan, and Pennsylvania have similar bills pending. Proposed legislation in Connecticut, Hawaii, Illinois, and Missouri that sought comparable reforms has been unsuccessful. Legislators in California and New Jersey are studying the issue in more detail. Although these reforms represent a long overdue correction of residency training first introduced nearly a century ago, the commission's recommendations may have hidden liabilities that could threaten fruitful post-graduate medical education and compromise patient care. Forcing house officers to leave after twenty-four hours on call may deprive them of an educational process that continues into the day after admission. A resident's preliminary clinical impressions are often refined by instruction from senior staff bolstered by laboratory results available only the morning after admission. This critical period of instruction could be jeopardized by state relations. Continuity of care is often compromised by shortened shifts which require that more physicians participate in an individual patient's management. Under the Bell regulations, patients admitted overnight to the hospital might expect their care to be provided by three different physicians over the first twenty-four hours of hospitalization. When a group of physicians replace an individual practitioner, the risk of miscommunication is heightened. Sign-out procedures between physicians are unfortunately unable to replace first-hand knowledge of a patient. The intricate "cross coverage" system needed to comply with the Bell reforms also requires residents to cover for patients they have never met. When residents do meet their colleagues' patients it is generally because of an acute problem that requires them to distinguish the unimportant complaint from the critical symptom. Deprived of any previous exposure to the patient, save for the sign-out sheet, inexperienced physicians will often order additional medical tests "to play it safe. …