Effect of foreign GAAP earnings and Form 20-F reconciliations on revisions of analysts' forecasts

A controversial area of U.S. securities regulations involves the Securities and Exchange Commission's (SEC) financial reporting requirements for foreign firms, specifically, the necessity of providing a quantitative reconciliation to U.S. GAAP (Form 20-F). The results of earnings-returns research to date indicate that the release of foreign GAAP earnings provides important information. However, the results of earnings-returns studies using reconciled information are mixed. Instead of using an earnings-returns methodology adopted in prior research, this study utilizes analysts' revisions as a market indicator of the effect of information released in foreign GAAP earnings and the reconciled information in Form 20-F. Additionally, the study investigates the influence of four firm-specific variables in the firm's information environment—similarities of accounting systems, analyst following, difference between reconciled earnings and foreign GAAP earnings, and dispersion of analysts' expectations—on positive abnormal revision activities of financial analysts at the time of filing Form 20-F.The results indicate that the release of foreign GAAP earnings (at earnings announcement dates) and reconciled information (at the time of filing Form 20-F) contains relevant information as measured by analysts' revisions. Further, variables representing analyst following, change in reconciled earnings, and dispersion of analysts' expectations are significant in explaining the variation observed in positive abnormal revisions.     

Economic value and cost-effectiveness of biventricular versus right ventricular pacing: results from the BLOCK-HF study

Abstract

Aims: The Biventricular vs Right Ventricular Pacing in Heart Failure Patients with Atrioventricular Block (BLOCK-HF) demonstrated that biventricular (BiV) pacing resulted in better clinical and structural outcomes compared to right ventricular (RV) pacing in patients with atrioventricular (AV) block and reduced left ventricular ejection fraction (LVEF; ≤50%). This study investigated the cost-effectiveness of BiV vs RV pacing in the patient population enrolled in the BLOCK-HF trial.

Methods: All-cause mortality, New York Heart Association (NYHA) Class distribution over time, and NYHA-specific heart failure (HF)-related healthcare utilization rates were predicted using statistical models based on BLOCK-HF patient data. A proportion-in-state model calculated cost-effectiveness from the Medicare payer perspective.

Results: The predicted patient survival was 6.78?years with RV and 7.52?years with BiV pacing, a 10.9% increase over lifetime. BiV pacing resulted in 0.41 more quality-adjusted life years (QALYs) compared to RV pacing, at an additional cost of $12,537. The “base-case” incremental cost-effectiveness ratio (ICER) was $30,860/QALY gained. Within the clinical sub-groups, the highest observed ICER was $43,687 (NYHA Class I). Patients receiving combined BiV pacing and defibrillation (BiV-D) devices were projected to benefit more (0.84?years gained) than BiV pacemaker (BiV-P) recipients (0.49?years gained), compared to dual-chamber pacemakers.

Conclusions: BiV pacing in AV block patients improves survival and attenuates HF progression compared to RV pacing. ICERs were consistently below the US acceptability threshold ($50,000/QALY). From a US Medicare perspective, the additional up-front cost associated with offering BiV pacing to the BLOCK-HF patient population appears justified.     

Adoption of the Balanced Scorecard: A Contingency Variables Analysis

Our study investigates the adoption of the Balanced Scorecard (BSC) as a strategic planning system. We empirically examine the firm‐level factors—business‐level strategy, firm size, environmental uncertainty, investment in intangible assets, and prior performance— that are posited to differentiate BSC adopters from nonadopters. Drawing on a sample of Canadian firms and utilizing both survey and archival data, we find that BSC adopters (a) are more likely to follow a Prospector or Analyzer business strategy, (b) are significantly larger, (c) exhibit significantly higher environmental uncertainty than nonadopters, and (d) have weaker prior performance. Copyright © 2011 ASAC. Published by John Wiley & Sons, Ltd.     

Infrastructure Development and FDI Inflow to Developing Economies: Evidence from India

Nowadays, developing economies are becoming the preferred destination of foreign direct investment (FDI) inflow. We draw insights from Dunning's eclectic paradigm to explore how FDI inflow is influenced by the quality of the physical infrastructure and human resources of the host country. We investigate various India‐specific infrastructural factors affecting FDI inflow between 1991 and 2010. Our empirical findings indicate that factors like railway transportation and road network as well as the quality of human resources played a crucial role in attracting FDI. However, air transportation or communication infrastructure is yet to play a significant role. Our study makes a modest attempt to identify areas of concern and scope for the further improvement of India's infrastructure facilities to attract foreign investment in the future. © 2016 Wiley Periodicals, Inc.     

Dangerous knowledge: Can nuclear weapons be abolished?

The end of the Cold War spurred significant and encouraging steps towards the abolition and eradication of nuclear weapons. After the breakthrough discussions between Gorbachev and Reagan at Reykjavik in 1986, the substantial cut-backs in Russian and American nuclear warheads agreed to under the Strategic Arms Reduction Treaty (START) negotiations, successive initiatives at the United Nations (UN) and the review conferences of the Non-Proliferation Treaty, the Canberra Commission's report in 1995, the 1996 advisory opinion of the World Court, the New Agenda Coalition, Middle Powers Initiative and other efforts by governments and non-governmental organizations (NGOs) raised hope that the world may soon be rid of this menace. After 1997 the momentum of progress slowed and then turned from optimism to increasing frustration, pessimism and despair. The possession of nuclear weapons serves not only military and political but economic and social functions, elevating the prestige of the select nuclear group to a special status in world affairs that none will be anxious to relinquish voluntarily. Yet in spite of the setbacks and the obstacles, there is ample scope for constructive action. Most promising is a renewed effort to establish international law prohibiting the use, threat of use or possession of nuclear weapons, along the lines of the Chemical Weapons Convention that has very effectively stopped the use of these weapons in all but one instance since 1925. At the root of the nuclear problem, a Cartesian dualism in our thinking about ourselves and the world fosters a sense of detachment, complacency and inactivity regarding an issue that holds our very lives in the balance. The finite zero-sum game of competitive international security needs to be replaced by an infinite win-win game of global cooperative security like that now unfolding on a model scale in Europe.     

Getting on top of the firm's energy situation

The energy problem remains unsolved, and a manager must continue to make energy-related decisions. To help minimize risk, the author suggests an energy audit consisting of six steps.     

Does trading volume detect information content in earnings reconciliations of foreign firms?

Currently, foreign firms trading securities on U.S. markets provide periodically a quantitative reconciliation of selected financial data consistent with U.S. GAAP (hereafter referred to as reconciled information) in Form 20-F. The SEC is examining whether users believe that this reconciliation process provides additional information above that provided by the foreign GAAP earning announcement and whether this incremental information enhances usefulness for market participants. We examine whether the reconciliation affects a primary indicator of information usefulness: the trading volume of capital markets participants.We use a regression model to examine the relation between a measure of abnormal trading volume and four firm-specific variables in the firm's information environment: similarities of accounting systems, analyst following, difference between reconciled earnings and foreign GAAP earnings, and dispersion of analysts’ expectations. We find a significant relation between abnormal volume and the reconciled earnings number and between abnormal volume and the dispersion of analysts forecasts. Our findings suggest that market participants may use the 20-F reconciliation in trading decisions.