The Economic Impact of SFAS NO. 157

Statement of Financial Accounting Standards No. 157, “Fair Value Measurements,” (SFAS 157) defines fair value, establishes a three tiered framework for measuring fair value and expands the required disclosures about fair value measurements. The objective of this study is to examine and evaluate the benefits of the information disclosed by SFAS 157. The results of our study indicated that a large majority of the inputs are observable in that 93.5% of the sample financial assets and 93.1% of the sample financial liabilities were measured by level 1 or 2 criteria. However, we found a mismatch between assets and liabilities subject to the three tiers of fair value measurements. The companies in our sample disclosed $18.8 trillion in total assets, with 51%, or $18.8 trillion in total assets, with 51%, or 9.5 trillion reported at fair value. Whereas, sample company liabilities totaled 16.1 trillion with only16.1 trillion with only 3.7 trillion or 23% reported at fair value.     

The Economic Consequences of the Statement of Financial Accounting Standards (SFAS) No. 150

SFAS No. 150, “Accounting For Certain Financial Instruments with Characteristics of Both Liabilities and Equity” (SFAS 150), requires companies to report mandatorily redeemable preferred stock (MRPS) as a liability, and the dividends on these securities as interest expense. The purpose of this study is to examine the economic consequences of SFAS 150’s adoption on a sample of public companies. Our analysis indicates that adoption resulted in both intended and possible unintended economic consequences. Specifically: (1) the impact of SFAS 150 on non-public companies caused the FASB to review its position on the disclosures concerning MRPS; (2) some companies redeemed their MRPS prior to the adoption date of the standard; and (3) approximately 4% of sample firms were required to disclose MRPS as a liability.     

The Impact of FSP FAS 157-4 on Commercial Banks

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS 157). Later in 2008, U. S. banks were mired in a credit crisis. Many economists and bankers suggested that one cause of the 2008 credit crisis was the requirements of SFAS 157 and a movement began to have its provisions amended or rescinded. The result of this movement was the passage of FSP FAS 157-4. The purposes of this study are to chronicle the events that lead to the release of FSP FAS 157-4, to report on the impact of FSP FAS 157-4 for the quarter ending March 31, 2009 for a sample of banks and to investigate the characteristics of the banks that early adopted FSP FAS 157-4 as compared to the non-adopters. The results did not find the predicted income increasing effect and indicated that total asset size and financial asset size were significant factors in the early adoption decision.     

Foreign currency translation under the temporal rate method

Statements of Financial Accounting Standards (SFAS) are rules and procedures designed to establish reliable financial information. The Financial Accounting Standards Board (FASB) defines reliable financial information in Statement of Financial Accounting Concept No. 2 as information that is reasonably free from error and bias and faithfully represents what it purports to represent [FASB, 1980, paragraphs 59, 77]. Under SFAS No. 52 [FASB, 1981], however, the temporal rate method of translating foreign currency denominated financial statements may not produce reliable information. The result is that consolidated financial statements of U.S. companies may include unreliable components such as under (over) valued assets. The findings of this paper are important because unreliable financial information places U.S. firms at a competitive disadvantage by hindering efficient and effective business decisions.     

An examination of long-lived asset impairments under SFAS No. 121

Until recently, the impairment of long-lived assets and identifiable intangibles was a controversial and unresolved accounting issue. Statement of Financial Accounting Standards (SFAS) No. 121 on long-lived asset impairments provides guidelines in selecting the conditions or circumstances that justify or necessitate a writedown and in measuring, recognizing, and disclosing the amounts of asset impairments. The results indicate that the financial impacts of 935 writedowns reported by 670 companies are quite significant and, in some cases, up to 10 times that of reported earnings. Moreover, the results indicate that industry classification consistently had a significant effect on the dependent variables used as proxies for the financial impacts of asset impairments.     

Earnings management by the early adopters of SFAS No. 106

Statement of Financial Accounting Standard (SFAS) No. 106 on Nonpension Postretirement Benefits (NPB) provides managers with a relatively long adoption window and choice of transition methods which can be used by affected companies to manage earnings. This paper examines whether management's choice of adoption timing is motivated by the desire to manage earnings. Fisher's [1934] exact probability analysis is used to test the hypothesis regarding profitability of a sample of 200 early and late adopters of SFAS No. 106. The results indicate that the profitability of adopting the income-reducing accounting standard (SFAS No. 106) early is significantly higher for more profitable firms than for less profitable firms.     

Effect Of Liquidity On Firms' R&D Spending

The effect of firms financial condition on their R&D investment is explored using a relatively long panel data set for five high-technology industries. We find that financial condition, whether measured as cash flow, the stock of liquid assets or the ratio of liquid assets to current liabilities, does affect the R&D spending of small firms. The effect persists after controlling for unobserved permanent firm effects, and the pattern of significance of lagged effects supports the interpretation of causality running from liquidity to R&D. For larger firms, there is no evidence of such an effect. Using these data, we cannot say whether the absence of an effect in larger firms results from better access to capital markets or from higher adjustment costs in R&D.     

The impact of R&D programme success on the decision to capitalise development expenditures in European firms

The financial reporting treatment of R&D expenditures can have important implications for firms’ strategic investment in R&D. Yet, financial reporting issues have been largely neglected in the R&D management literature. In this study, we first hypothesise that firms’ capitalisation of development expenditures subsequent to the mandatory adoption of IAS 38 (International Accounting Standard 38: Intangible Assets) is positively and significantly impacted by a measure of R&D programme success. Our empirical findings – based on a pan-European sample of firms – reveal strong support for this prediction. Our findings also offer support for our second hypothesis which predicts that capitalisation of development expenditures in conjunction with an evaluation of R&D programme success has a positive and significant impact on growth in shareholder value. Consequently, our work suggests that an important challenge for R&D professionals within firms is to develop improved measures of R&D success and to communicate this information to senior executives.     

An examination of financial impacts of SFAS No. 106

Conclusion SFAS No. 106 requires companies to accrue the expected cost of OPEB during the years employees provide services to the company. The Statement is based on the assumption that OPEB are a form of deferred compensation and the resulting obligation should be recognized when services are rendered. This article examined some provisions of the Statement and the possible impact on financial statements of affected companies as well as management efforts to control OPEB costs. The results indicate that adoption of SFAS No. 106 has caused companies to report OPEB transition obligations on their balance sheets and to show higher OPEB annual expenses on their income statements. These perceived negative financial impacts of adopting SFAS No. 106 do not appear to have encouraged management to take immediate actions to curtail the promised OPEB. However, in many cases, management is considering implementing changes in plan design such as increasing or imposing retiree contribution levels or retiree deductibles and higher coinsurance levels, reducing benefits and coverage, and changing coordination of benefits with Medicare in attempt to mitigate the possible negative financial impacts of adopting SFAS No. 106.     

Creative Disasters? Flooding Effects on Capital,Labour and Productivity Within European Firms

This paper examines the impact of floods on the firms’ capital accumulation, employment growth and productivity by using a difference-in-difference (DID) approach and considering the firms’ asset structure. We find evidence that, in the short run, companies in regions hit by a flood show on average higher growth of total assets and employment than firms in regions unaffected by flooding. The positive effect prevails for companies with larger shares of intangible assets. Regarding the firms’ productivity a negative flood effect is observable which declines with an increasing share of intangible assets.      

The effect of the tax reform act of 1986 on the location of assets in financial services firms

This paper examines the effects of the Tax Reform Act of 1986 on the international location decisions of U.S. financial services firms. The Act included rule changes that made it substantially more difficult for U.S. firms to defer U.S. taxes on overseas financial services income held in low-tax jurisdictions. We use information from the tax returns of U.S. corporations to examine how local taxes affect the allocation of financial assets held abroad by financial services firms. We find that, before the Act, the location of reported assets in financial subsidiaries was responsive to differences in host country tax rates across jurisdictions. However, after the Act, differences in host country tax rates no longer explain the distribution of assets held in financial services subsidiaries abroad. Our results suggest that the tightening of the anti-deferral provisions applicable to financial services companies has been successful in diminishing the effect of host country income taxes on asset location decisions.     

公允价值运用评价——基于美国公司财务报告的分析

会计业一直处于不断变化的状态.在美国历史成本原则传统上一直被认为是会计核算的基础.直到现在,除了特定的金融资产和金融负债,当资产和负债发生时,仍然也是按照取得时价款进行计量.然而,美国财务会计准则委员会(Financial Accounting Standards Board,FASB)发布的会计准则与历史成本计量原则越来越远.2006年9月FASB发布了财务会计准则公告157号:公允价值计量(SFAS157,现在编纂为会计准则汇编Accounting Standards Codificatio 820,ASC 820),2007年2月FASB发布了财务会计准则159号:金融资产和金融负债的公允价值选择(SFAS159,现编纂为ASC 825-10-25),这两个准则极大地提升了公允价值会计的有效性.文章通过对美国公司财务报告的研究和分析,论述了公允价值的优缺点和由于公允价值的运用给不同股东带来的影响.     

Financial Market Data Versus Accounting Data: Which Better Explains Stock Returns?

This paper presents the comparison of how financial market and accounting data affect stock prices and returns. The goal was to ascertain whether financial information or accounting data dominate in evaluating stock prices. Most valuation techniques used by firms are based on models using either accounting variables (earnings, book value, cash flows, research and development expenses) or financial market data (e.g. beta, market value, interest). The answer is of great importance for valuators and investors as it will help them focus on the most important variables and make better valuations and choices. This answer is also important for accounting standard setters as the preferred method will serve as an indicator for the quality of financial statements and their importance to users. The paper contributes to the existing literature in the fields of value relevance of accounting information and firm valuation and accounting standards (e.g. International Financial Reporting Standards, United States General Accepted Accounting Principles). To answer this question, share prices were estimated based on financial data using the capital asset pricing model and for accounting data, using Ohlson’s model. The results were tested for both methodologies by comparing estimated share prices with actual ones. The greater the correlation between the two variables the better the explanatory power of the model. The focus was on S&P 500 firms for the period 2002–2017.

     

基于公司特征的财务困境成本影响因素研究

基于对财务困境的形成及解决机制分析,财务困境成本的影响因素应包括资产特征、债务特征、产品特征和成长性等公司特征。实证研究表明:资产流动性、债务融资能力与财务困境成本负相关;资产专用性程度、债务结构的复杂程度、成长性与财务困境成本正相关。上述研究结论对于企业调整财务政策,降低财务困境成本具有指导意义,同时对于监管部门也有参考价值,即监管部门应针对具有不同公司特征的上市公司实行分类管理,提高监管效率。     

金融不良资产处置中的企业偿债能力评估

在金融资产管理公司运用债权(债务)重组手段处置不良资产过程中,客观上要求评估债务企业的偿债能力,而目前国家还没有这方面的统一规范,作者力求从理论和法规角度为开展这一评估找到基础,并全面系统地阐述了这一评估方法的基本思路。     

诉讼风险、资金持有与企业资产配置

本文以企业的固定资产和金融资产配置为切入点,选用2001—2015年所有A股非金融类上市公司的诉讼数据,实证检验了诉讼风险对企业资产配置决策的影响。结果表明,诉讼风险对企业资产配置具有负向调节作用,尤其显著缩减了金融资产的配置规模和比例;诉讼风险对非国有企业及中西部地区企业资产配置的冲击更为明显;诉讼风险的作用机理是资金削弱效应,即减少内部可用现金流和提高外部可融资金成本。本文的研究为我国市场经济法制建设的完善和企业投融资决策提供了启示。     

Incomplete markets: transverse financial structures

Summary. In a multiperiod economy with incomplete markets and assets with payoff depending on the price history (e.g., asset and derivatives), we show that in order to get endowment generic existence of an equilibrium it is not needed to alter settlement features such as when payments are made and when the asset is traded. This is non-trivial as each such characteristic introduces a non-generic subclass of financial instruments. We show essentially that expiry date payments are the only payments that one needs perturbing (if at all). For previous periods - the P&L discovery map - is the one relevant for wealth transfers. This map transfers wealth between one period and the next by associating to each portfolio next period potential profit and losses as a function of the revealed information at the node. All present values involved can in general - because of backward induction pricing structure - be appropriately controlled via expiry payoffs only. This enables us to extend two-period work and introduce Transverse Financial Structures for multiperiod economies, where one cannot identify the payoffs of financial instruments to the P&L discovery map (in other words we introduce some financial ingeneering for Transverse Financial Structures). We capitalize on that difference using unexploited “maturity payout degrees of freedom” and rolling back the uncertainty tree. As an application of this approach we prove a conjecture by Magill and Quinzii that commodity forward contracts lead to endowment generic existence of an equilibrium in a multiperiod set-up. Received: June 25, 1999; revised version: April 4, 2001     

企业金融资产配置对双元创新的影响

以2014-2016年非金融上市公司为样本，研究不同种类的金融资产配置对双元创新的影响，考察高管激励方式在两者之间的调节效应，并基于产权异质性作进一步检验。引入ITCV方法测量内生性问题是否改变了回归结果，以检验结论的稳健性。研究发现：①短期金融资产配置对双元创新不产生蓄水池效应；②长期金融资产配置对探索式创新具有挤出效应，而对开发式创新挤出效应受到产权异质性的影响；③相对于开发式创新，长期金融资产对探索式创新的挤出效应更加显著；④国有企业中，股权激励有助于弱化长期金融资产配置对双元创新的挤出效应，而在非国有企业中，这一调节效应并不显著；⑤相对于探索式创新，薪酬激励弱化长期金融资产配置对开发式创新的挤出效应更加显著。     

开放视角下的国家综合负债风险与市场化分担

随着中国经济金融的日益开放,中国国家综合负债的规模与结构在动态变化:一方面,国家综合负债的某些旧因素(如银行不良资产)的存在形式发生了变化,另一方面,国家综合负债的一些新因素(社保基金缺口、巴塞尔协议的顺周期影响和汇率波动导致的外汇资产损失)开始显现。从开放视角考察,中国的国家综合负债风险形势仍较为严峻。在政府承担社会性支出的基础上,更多地重视和运用市场化分担方式是化解和防范国家综合负债风险的基本途径,保持经济持续稳定增长是应对国家综合负债风险的根本保障。     

中国非金融企业金融化对企业创新的影响

分析非金融企业金融化影响企业创新的作用机制，利用2009-2017年我国上市公司数据对各种机制作用效果进行实证检验。结果发现：金融负债渠道对于企业创新具有显著正向作用，且正向作用主要体现在企业创新规模而非比重上；金融资产渠道对于企业创新的影响并不显著，但企业房地产投资显著负向影响企业创新规模；股东价值导向渠道对企业创新未表现出显著作用。进一步区分企业产权性质的研究表明，金融负债渠道对创新的影响主要体现在民营企业，地方国有企业次之，中央国有企业不显著；金融资产和股东价值导向渠道没有表现出产权异质性。因此，可从深化金融供给侧改革、严控实体企业房地产投资行为、推进股票市场改革、探索更为多元和有针对性的创新支持措施4个方面不断提升非金融企业金融化对于企业创新的正面作用。