Cost Accounting Model Research Articles

In search of financial sufficiency in the Spanish public university: From financing to the cost control and cost management

Purpose: The current socio-economic context characterized by restrictive budgetary policies in the countries of the European Union has led to a reduction in public funding in the Spanish public university raising the deficit in many universities. That is why, while they are completing the implementation of a cost accounting model (Modelo Canoa) to quantify their real financial needs, are also increasing academic rates with the limits established in the Decree-Law 14/2012 of 20 April as practically the only resource. This fact may ultimately affect demand. It is urgent to find therefore new sources of private funding as well as implementing techniques to control and reduce costs justified by the extreme financial situations of some universities. Design/methodology: These new sources of private funding as well as the specific techniques of control and cost management that are used in public universities outside of Spain are described. It has also made a poll to the managers of the Spanish public universities considering the diversification of funding sources and the feasibility of adopting specific techniques of control and cost management to help the achievement of financial sufficiency. Findings: Especially in the US universities, financing is more diversified and not depend so much of the increase in public rates. Specific techniques of control and cost management are also used and they are applicable to the Spanish case according to the opinion of the managers. Research limitations/implications: 8 2 % of managers have completed the proposed poll. Originality/value: Identifying sources of private funding and specific techniques of control and cost management applicable to the Spanish public universities.

Fair value accounting choice

Purpose– Profiting from a unique research opportunity in the Portuguese REIFs market, this paper aims to investigate the impact of fund managers ' accounting choice on funds ' returns distribution and analyses the relationship between fair value accounting choice and conditional accounting conservatism.Design/methodology/approach– According to Portuguese securities market regulation, fund managers of REIFs can fix the value of the fund properties between the acquisition cost and the average of the appraisal values assigned periodically by two independent appraisers. Therefore, through the analysis of fund managers’ actual choice to value REIF net asset value in comparison with a mandatory adoption of a pure fair value method (appraisers’ valuations), the paper investigates the impact of accounting choice on funds’ return series. On the other hand, an analysis at fund level is also conducted to determine the consequences of fair value accounting choice on the ability of fund managers in delaying the recognition of asset value decreases (bad news).Findings– Results indicate that in the period of financial crisis, significant differences in REIF returns according to the accounting method used to value properties are observed. There is also evidence that fund managers of open-end funds that are subject to greater market pressure to meet financial reporting objectives are more likely to smooth book value returns. Additionally, findings support the hypothesis that REIFs that use a more historical cost accounting model exhibit a lower degree of conditional accounting conservatism, suggesting that the use of fair value may be useful to reduce fund manager discretion in delaying the recognition of losses.Originality/value– This paper provides an empirical evidence of one possible positive effect of the use of fair value on the quality of financial reporting, evidencing how a more fair value accounting model may limit fund managers’ discretion.

Accounting valuation models under international financial reporting standards: evidence from some European listed companies

The aim of this paper is to examine the value relevance of accounting information following the voluntarily IFRS adoption in the pre–IFRS period (from 2000 to 2004). Moreover, this paper compares the relevance of the two accounting valuation models as the historical cost versus Fair Value Accounting (FVA) following the mandatory IFRS adoption. We use a panel data collected from a sample of 106 firms listed at the stock exchange of three European countries (Germany, France and Belgium). The results suggest that the value relevance of accounting information in firms that voluntarily adopt IFRS decreases compared to in firms that report their financial statements into domestic standards (DS). Our findings confirm that the FVA model is more relevant than historical cost accounting model. This paper contributes to the existing literature by comparing the accounting quality of voluntary IFRS–firms and DS–firms and the choice of the more relevant accounting valuation models. This study highlights the importance of fair value for the improvement of investors' making decisions.

Comprehensive Income and Financial Performance Ratios: Which Potential Effects on RoE and on Firm's Performance Evaluation?

Abstract The reporting of comprehensive income is becoming increasingly important. The new version of IAS 1 (the so called IAS1-revised) issued by IASB on September 2007 provides the mandatory reporting of other comprehensive income items for the EU listed companies. This circumstance is of particular relevance in the Italian context, characterized by a strong historical cost accounting model and by concentrated ownership publicly traded companies. This study aims to examine the potential impact of unrealized gains and losses reporting on entities performance ratio, and thus on investors’ decision process, by investigating its effects on Italian listed entities. The results show that the first time adoption of comprehensive income reporting does significantly affect Italian listed entities performance, notwithstanding the apparent irrelevant spread existing between net income and comprehensive income book values.

The introduction of Greek Central Health Fund: Has the reform met its goal in the sector of Primary Health Care or is there a new model needed?

BackgroundThe National Organization for Healthcare Provision (EOPYY) originates from the recent reform in Greek healthcare, aiming amidst economic predicament, at the rationalization of health expenditure and reactivation of the pivotal role of Primary Health Care (PHC). Health funding (public/private) mix is examined, alongside the role of pre-existing health insurance funds. The main pursuit of this paper is to evaluate whether EOPYY has met its goals.MethodsThe article surveys for best practices in advanced health systems and similar sickness funds. The main benchmarks focus on PHC provision and providers’ reimbursement. It then turns to an analysis of EOPYY, focusing on specific questions and searching the relevant databases. It compares the best practice examples to the EOPYY (alongside further developments set by new legislation in L 4238/14), revealing weaknesses relevant to non-integrated PHC network, unbalanced manpower, non-gatekeeping, under-financing and other funding problems caused by the current crisis. Finally, a new model of medical procedures cost accounting was tested in health centers.ResultsAn alternative operation of EOPYY functioning primarily as an insurer whereas its proprietary units are integrated with these of the NHS is proposed. The paper claims it is critical to revise the current induced demand favorable reimbursement system, via per capita payments for physicians combined with extra pay-for-performance payments, while cost accounting corroborates a prospective system for NHS’s and EOPYY’s units, under a combination of global budgets and Ambulatory Patient Groups (APGs)ConclusionsSelf-critical points on the limitations of results due to lack of adequate data (not) given by EOPYY are initially raised. Then the issue concerning the debate between ‘copying’ benchmarks and ‘a la cart’ selectively adopting and adapting best practices from wider experience is discussed, with preference to the latter. The idea of an ‘a la cart’ choice of international examples is proposed. The ‘results’ discussing EOPYY’s dual function and induced-demand favorable reimbursement system are further critically examined. International experience shows evidence of effective alternatives, such as per capita and pay-for-performance payments for practicing doctors as well as per case reimbursement for health centers under global budget principles.

Budgeting System in Construction Organizations in Conditions of Process-Oriented Normative Model of Cost Accounting

The article analyses the features of the structure of the budgeting system in conditions of the process-oriented normative method of cost management. The authors set out the peculiarities of budget development in the construction industry, consider the stages of implementation of process-oriented budgeting in conditions of application the process-oriented normative method of cost management in construction industry. Using this model can be very useful for construction industry companies and help them set their goals to achieve performance indicators. DOI: 10.5901/mjss.2014.v5n24p56

Adopting material flow cost accounting model for improved waste-reduction decisions in a micro-brewery

This paper report findings from a pilot study in a micro-brewery that demonstrates the adoption of the MFCA model to capture adequate waste-cost information to support and improve waste-reduction decisions. While studies have shown that applying MFCA is a relevant tool in providing both financial and non-financial waste information for improving waste-reduction decisions in large- and medium-sized organizations, its adoption in a micro-brewery set-up is lacking. Findings reveal that the MFCA model can be adopted within different management systems to improve waste-reduction decision and cost savings. A significant implication for practice is the potential to adopt the MFCA model under different organizational circumstances that generally do not support systematically structured management approaches. A major significance of the findings in this study serves to focus the attention of owner–managers in micro-business circumstances on the management of product material and energy losses as well as the inclusion of certain production processes costs in product cost.

Research and Application of Activity-Based Costing in Drop and Pull Transport Enterprises Cost Management

In order to realize the accurate accounting, accurate tracking and effective control of the cost of drop and pull transport enterprises, this paper established the costing model based on TDABC and combined with relevant cases to explain its implementation process. The cost accounting model makes cost accounting more convenient and economic, resource allocation and activitiy process more intuitive and clear, effectively improves the accuracy of cost accounting of drop and pull transport enterprise. TDABC will avoid the offset of costs and benefits in the traditional cost method, help enterprises to understand the overall development of its own operating characteristics and provide new ideas.

Cost Accounting and Control Model Research Based on Cluster Supply Chain

Enterprise management mode is being changed by a single enterprise management mode into supply chain management. The development of economy calls for the needs of the application of cost management in the supply chain, which is one of the most important trends in the field of cost management. However, the weak basis for cost management of small and medium enterprises (SMEs) and the lack of funds and personnel various resources make most of the current cost management methods and technologies in supply chain cannot be applied into SMEs’ management. All of these give practitioners in SMEs and researchers in the field of cost research an important research topic-the unique management mode of cost management for SMEs in the supply chain environment.

Cost model for biobanks.

Current economic conditions and budget constraints in publicly funded biomedical research have brought about a renewed interest in analyzing the cost and economic viability of research infrastructures. However, there are no proposals for specific cost accounting models for these types of organizations in the international scientific literature. The aim of this paper is to present the basis of a cost analysis model useful for any biobank regardless of the human biological samples that it stores for biomedical research. The development of a unique cost model for biobanks can be a complicated task due to the diversity of the biological samples they store. Different types of samples (DNA, tumor tissues, blood, serum, etc.) require different production processes. Nonetheless, the common basic steps of the production process can be identified. Thus, the costs incurred in each step can be analyzed in detail to provide cost information. Six stages and four cost objects were obtained by taking the production processes of biobanks belonging to the Spanish National Biobank Network as a starting point. Templates and examples are provided to help managers to identify and classify the costs involved in their own biobanks to implement the model. The application of this methodology will provide accurate information on cost objects, along with useful information to give an economic value to the stored samples, to analyze the efficiency of the production process and to evaluate the viability of some sample collections.

THE IMPACT OF THE GREEK ECONOMIC CRISIS ON THE GREEK CONSTRUCTION COMPANIES. BACK TO BASICS: THE STATISTICAL COST ACCOUNTING MODEL

This study applies to the statistical cost accounting model to capture the impact of the Greek economic crisis on the returns of the Greek construction sector using the published financial statements of the construction firms listed on the Athens Exchange during 2005-2011. The evidence from our analysis suggests that the construction sector has been affected by the Greek crisis since there is a great decrease of the construction activities. According to our results, our findings support the theoretical model and reveals that there is a negative impact on the earnings due to the underemployment of the fixed assets. Additionally, we find that the cash and cash equivalent items do not actually help our sample firms to produce profit and the most expensive item of the balance sheet is the non financial short term liabilities.

Costs of Expanding the Network of Protected Areas as a Response to Climate Change in the Cape Floristic Region

The expansion of protected areas is a critical component of strategies to promote the continued existence of biodiversity (i.e., life at all levels of biological organization) as climate changes, but scientific, social, and economic uncertainties associated with climate change are some of the major obstacles preventing such expansion. New models of climate change and species distribution and new methods of conservation planning now make it possible to explore the uncertainties associated with climate changes and species responses. Yet few reliable estimates of the costs of expanding protected areas and methods for determining these costs exist, largely because of the many (and uncertain) determinants of these costs. We developed a cost-accounting model to estimate the range in costs of various options for expanding protected areas and to explore the variables that drive these costs. Model development was informed by an existing plan to expand protected areas in the Cape Floristic Region of South Africa to address species conservation under a scenario of climate change. The 50-year present value of total costs varied from US$260 million ($1077/ha) for an off-reserve option that involves agreements with landowners and no compensation of forgone production and associated revenue to $1020 million ($4228/ha) for an on-reserve option that involves land acquisition and protection. The costs of acquiring land or compensating landowners for forgone production and development opportunities were the major drivers of the total costs across all options because most of the area identified in the protected-area expansion plan consisted of urban and high-quality agricultural lands. Total costs were also affected by changes in protected area extent and discount rate. Model-generated outputs such as these may be useful for informing implementation strategies and the allocation of future efforts in monitoring, data collection, and model development.

New cost accounting models in measuring of library employees' performance

Purpose – The current article aims to give an overview of how the new cost accounting models, such as activity‐based costing (ABC) and time‐driven activity‐based costing (TDABC) are researched and adapted by university libraries, focusing on the methods used for measuring work time allocation as well as on the strengths and weaknesses of both models.Design/methodology/approach – The data used in this paper are based on reviewing and summarizing of relevant studies which were conducted in libraries inspired by the ideas of modern theoretical considerations and treatments relating to cost accounting and costing, originally developed for industry and private sector organizations.Findings – The implementation of cost accounting systems in libraries has historically been treated as a technical innovation rather than an organizational or management innovation. The most important consideration is that librarians are not machines, which can be set at a given speed and expected to produce a uniform product. It tur...

Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC): Applicable Methods for University Libraries?

Objective – This article provides an overview of how university libraries research and adapt new cost accounting models, such as “activity-based costing” (ABC) and “time-driven activity-based costing” (TDABC), focusing on the strengths and weaknesses of both methods to determine which of these two is suitable for application in university libraries.
 
 Methods – This paper reviews and summarizes the literature on cost accounting and costing practices of university libraries. A brief overview of the history of cost accounting, costing, and time and motion studies in libraries is also provided. The ABC and the TDABC method, designed as a revised and easier version of the ABC by Kaplan and Anderson (Kaplan & Anderson 2004) at the beginning of the 21st century, as well as the adoption and adaptation of these methods by university libraries are described, and their strengths and weaknesses, as well as their suitability for university libraries, are analyzed.
 
 Results – Cost accounting and costing studies in libraries have a long history, the first of these dating back to 1877. The development of cost accounting and time and motion studies can be seen as a natural evolution of techniques which were created to solve management problems. The ABC method is the best-known management accounting innovation of the last 20 years, and is already widely used in university libraries around the world. However, setting up an ABC system can be very costly, and the system needs to be regularly updated, which further increases its costs. The TDABC system can not only be implemented more quickly (and thus more cheaply), but also can be updated more easily than the traditional ABC, which makes the TDABC the more suitable method for university libraries.
 
 Conclusion – Both methods are suitable for university libraries. However, the ABC method can only be implemented in collaboration with an accounting department. The TDABC method can be tested and implemented by separate departments, and thus can contribute to the provision of better and more effective library services at lower costs. However, the involvement of experts in costing and accounting is recommended.

Metode Penilaian Akuntansi Agrikultural Berdasarkan IAS 41: Implementasi Fair Value Accounting

Agricultural activity is the management by an entity of the biologicaltransformation of biological assets for sale, into agricultual produce or intoadditional biological assets. Biological transformation comprises the processes ofgrowth, degeneratin, production, and procreation that cause qualitative orquantitave changes in biological asset.IAS 41 prescribes, among other things, the accounting treatment for biologicalassets during the period of growth, degeneration, production, and procreation,and for the initial measurement of agricultural produce at the point of harvest.Measurment and valuation in IAS 41 is consistent with a systematic shif in thedominant measurement paradigm away from traditional historical costaccounting model. Implementing Fair Value Accounting proponents point to theenhanced decision usefulness and transparency of fair value informationattributable to its timely reflection of current market conditions.

The impact of IFRS implementation on Greek listed companies

PurposeWhile the Greek GAAP is stakeholder‐oriented and commonly viewed as a historical cost accounting model, IFRS is shareholder‐oriented and generally perceived as a fair‐value accounting model. The study seeks to investigate the effects of adopting IFRSs on the financial statements of Greek listed companies. It focuses on major Greek industrial sectors and stock market indices and investigates the effects of IFRS adoption on company financial position and performance.Design/methodology/approachA binary logistic regression has been applied in order to capture the differences between the pre‐official adoption and official adoption periods. The model focuses on 2004 and 2005. The dependent variable is a dummy variable and takes the following values: 1 for 2005 and 0 for 2004.FindingsThe study shows that IFRS implementation has influenced positively the profitability of most industrial sectors as well as those firms that belong to FTSE 40 and SMALLCAP 80. IFRS adoption appears to negatively influence liquidity for a number of industrial sectors and stock market constituents. An increase in leverage is obtained from the examination of the sample stock market indices and industrial sectors. Similar findings are evidenced for firms of large size and high financing needs.Research limitations/implicationsThe study is limited in the following respects. The results reflect short‐term timing differences, which may reverse in later accounting periods. Also, companies should have anticipated IFRS adoption and might have adjusted their accounting policies accordingly, or even managed their reported numbers, in the period under investigation, since the EU Regulation passed in 2002.Originality/valueThe findings of the study are useful for investors, shareholders, financial analysts and other market participants as they provide information about the impact of IFRS implementation per major sector and market index. The effects would be expected to vary as each sector and market index carries different financial attributes. Users of accounting information could make use of the findings of the study for the evaluation of the financial performance and prospects of a sector/index and for other investment decision‐making purposes. The study also contributes to the literature as it focuses on a code law country that is stakeholder‐oriented.

Financial Statement Effects of Adopting International Accounting Standards: The Case of Greece

This paper investigates the effects of adopting International Accounting Standards (IAS) on financial statements and their value relevance for a sample of Greek firms during 2003-2004. By implementing an innovative research design, we make a comparison between accounting results reported under Greek accounting rules (Greek GAAP) with those under IAS for the same set of years and document how IAS adoption changes key financial measures and the value relevance of financial statement information. Greek accounting system is stakeholder-oriented and usually viewed as a historical cost accounting model that gives emphasis in income smoothing while IAS is shareholder-oriented and generally viewed as fair value accounting model that gives emphasis in balance sheet valuation. According to these realizations, we find that total assets and book value of equity as well as variability of book value and net income are significantly higher under IAS than Greek GAAP. In addition, we find that book value (net income) plays a greater (lesser) valuation role under IAS than under Greek GAAP. Finally, we find that while the IAS adjustments to book value are generally value relevant, the adjustments to net income are generally value irrelevant.

The Pure Logic of Accounting: A Critique of the Fair Value Revolution

When international accounting standards were renamed to become international financial reporting standards, this seemed to imply that accounting no longer needed to exist, but rather had to be reconsidered as a part of financial communication and advertising. Does traditional accountability no longer matter? Betrayed investors and globalized stakeholders would dissent. A difference of nature continues to exist between fair values disclosed by managers and certified by auditors, and the actual performance generated by the enterprise entity through time, space, and interaction. In a world shaped by complex organizations facing unfolding changes, hazard and limited knowledge, the quest for fundamental principles of accounting is not academic. Accounting principles constitute a primary way that the creation and allocation of business incomes is governed; that is, fairly managed and regulated in the public interest, having respect to “other people interests.” This article adopts a dualistic posture that opposes the accounting conceptual frameworks based on fair value (market basis) and historical cost and revenue (process basis). The fundamental premises about the underlying economics of the enterprise entity are discussed, including the representation of the business and the concepts of asset and liability. References are made to the case of accounting for intangibles, and to the distinction between equities and liabilities. The cost and revenue accounting perspective is then defended in terms of accountability, but also from the informational viewpoint: historical accounting information plays a special role as a lighthouse in the dynamic and strategic setting of the Share Exchange. In particular, two refinements of the historical cost (and revenue) accounting model are suggested. The first one regards the treatment of earned revenues from continuing operations, and the second, the recognition of shareholders' equity interest computed on the actual funds provided in the past, coupled with the distinction between shareholders' equity and entity equity.

University of Michigan Medical School

University of Michigan Medical School

Development of management and cost accounting of wood harvesting in the Republic of Karelia

Tyukina, O. 2010. Development of management and cost accounting of wood harvesting in the Republic of Karelia. Dissertationes Forestales 106, 131 p. Available at http:// www.metla.fi/dissertationes/df106.htm. During the Soviet Era, in the Karelian Autonomous Soviet Socialist Republic, the harvesting of wood was mainly arranged by state logging companies called lespromkhoz. The logging method then was the tree-length (TL) method, which was targeted for full mechanisation. A centralized management system with extremely centralized decision making was used in the whole of the Soviet Union. In this planned Soviet economy, the volumes of wood harvested and the roundwood prices were set by the Ministry of Forestry and Forest Industries, and costs were set according to standard, internally agreed upon, methods. In the early 1990 s, during the period of transition from the Soviet planned economy to the market economy the logging industry of the newly established Republic of Karelia fell into economic crisis. Wood harvesting in most of the Karelian logging companies had become unprofitable; the major reasons were cost increases and other cost factors due to the markets. In addition, the outdated technology and undeveloped infrastructure also affected the profitability. Many of the state owned lespromkhozes changed ownership, becoming joint stock companies, and many small logging companies were established. Within the context of drastic economic and societal transformations, this study describes and analyses both the changes in the wood harvesting management systems in the Republic of Karelia and the theory and practice of cost accounting for wood harvesting in Karelia and the Russian Federation. At present in Russia, and specifically in the Northwest, both the cut-to-length (CTL) and tree-length (TL) harvesting methods are commonly used. During the last 10-15 years, modern CTL technology has accounted for an increasing share of the harvesting. While there has also been some modernisation in TL technology, the traditional machines and methods still prevail. Harvesting cost calculations for the processes that are involved in the cutting areas and in the delivery to the domestic wood processing industry, or for export, were made for both the TL and CTL methods. All harvesting operations in the forest, as well as work at the logging terminal, are divided into the main activities along a logistic chain. Wood harvesting cost calculations for the TL and CTL methods are based on several work options, including the use of Russian and Nordic mechanisation, as well as manual methods. As part of the theory of cost-price accounting, the Russian method of cost-price and the Nordic method of wood harvesting cost calculation are studied and compared. Similarities exist in the cost categories of both methods, in that cost accounting is divided into fixed and variable costs, but there are also significant differences. One of the differences between the two is that an exchange value for machinery is taken into account in the Nordic method, but not in the Russian method. Cost accounting models for 2000-2005 indicate that the cost for harvesting with the CTL and TL methods in Karelia have increased by 2.5 times in real terms. The wood harvesting costs depend on the harvesting method and roundwood transportation distance; in 2005, for the CTL method, they ranged from 11-35 €/m, and for the TL method, they were from 13-42 €/m. However, it seems that the increasing use of the CTL method with Scandinavian technology in many cases is as much due to the new forms of organisation and management of harvesting work, as it is to cost calculations.