Investor valuations of suppliers' major customer disclosures

I investigate whether or not investors in suppliers to retailers find the major customer disclosure value-relevant. Major customer retailers have buyer power because the retailer represents a significant portion of a supplier's sales. Buyer power can indicate reliance on one customer where the supplier is at a disadvantage in negotiating transaction terms. Alternatively, the existence of major customers may suggest the supplier is in a mutually-benefiting partnership with the retailer. I hypothesize that investors find the major customer disclosure value-relevant; however, the direction depends on whether the investor focuses on the partnership aspect or sales concentrated with one customer. My valuation results are consistent with investors focusing on the sales concentration for larger suppliers (higher risk) and the mutually benefiting partnership for smaller suppliers (lower risk). The findings provide insight on valuation implications of having and disclosing a major customer.     

Fair Value Accounting and the Financial Crisis: Messenger or Contributor?*

This commentary discusses how fair value accounting (FVA) affects the nature of financial reporting, especially for financial institutions that were deeply affected by the 2007‐9 financial crisis. Toward that end, I address four questions. First, I review FVA's role in financial reporting, emphasizing its development over time. While the commentary's focus is on the interface between financial instruments and FVA, its reach extends well beyond financial instruments. Thereafter, I discuss the measurement and valuation challenges that arise from the use of FVA in financial reporting. Then, I analyze the evidence, analytical and empirical, on the role that FVA may have played in the financial crisis of 2007‐9. Since, to some extent, the crisis is still unfolding, there is limited yet very insightful empirical evidence on this issue. The evidence does suggest that FVA, in combination with its use by regulators, may have severely undermined the financial condition of some institutions. The effect was amplified for institutions holding assets in markets that saw their liquidity dry up during the crisis. In other words, FVA may have amplified the crisis. Finally, I discuss some implications that we can draw from the crisis about the merits and risks underlying FVA. For instance, I conclude that, in a search for relevance, the use of FVA in financial reporting may accelerate its disconnection from a firm's business reality.     

Determinants of discretionary fair value measurements: the case of Level 3 assets in the banking sector

The objective of our research was to respond to the call of Barth and Taylor ( 2010 ) for more research to examine the role of discretion in fair value estimates. Specifically, we investigate factors that explain banks’ accounting choices to use Level 3 valuation inputs from the fair value measurement hierarchy. Using hand‐collected data from a sample of international banks during 2009–2013, we find that incentives to use discretionary Level 3 valuation inputs, which can provide an opportunity to manage earnings, are associated with both firm‐level and country‐level determinants. Additional tests provide evidence that Level 3 ‘transfer‐in’ behaviour is related to changes in bank characteristics.     

Closed‐End Fund Discounts and Expected Investment Performance

This article provides empirical support for the theory that closed‐end fund discounts reflect expected investment performance. Evidence is presented to explain how equity closed‐end fund initial public offerings (IPOs) can sell at a premium when existing funds sell at a discount and why the initial IPO premiums decay after the IPO. Relative premium decay data are presented. Tests on (1) the relation between relative premium changes and investment performance following IPOs, (2) relative premium mean‐reversion following management changes, and (3) net redemptions following closed‐end fund open‐endings for funds trading at pre‐open‐ending announcement discounts individually support and collectively strongly support the theory.     

关于股票期权会计若干问题的探讨

随着我国企业改革的深化与市场经济的确立与完善,在企业中探索一种科学有效的激励机制已成为一个亟等解决的课题,股标期权制度作为近年来在西方国家中行之有效的一种企业激励机制,在我国也吸引了越来越多的注意力。本文在对股标期权概念及其激励作用进行分析的基础上,对股票期权的确认时机、股票期权的计量和设计股标期权应注意的问题进行了探讨。     

美国稳定价值基金探讨

稳定价值基金（Stable Value Fund）通过保证本金和累计利息达到避免净值波动和收益稳定的投资目标，实现货币市场基金高流动性和债券基金更高收益的最佳组合，为投资者提供稳定的投资价值。本文介绍了美国稳定价值基金的发展概况，分析了其运作机制、核心优势及其发展的历史原因，并对稳定价值基金与保本基金做了比较。     

Discussion of “The implications of unverifiable fair-value accounting: Evidence from the political economy of goodwill accounting”

Ramanna [2007. The implications of unverifiable fair-value accounting: evidence from the political economy of goodwill accounting, Journal of Accounting and Economics] provides interesting and novel evidence on how firms use contributions from their political action committees (PACs) to members of Congress as a means of lobbying for preferred positions on the two exposure drafts that led to SFAS-141 and SFAS-142. My discussion raises some concerns about his main conclusion: that pooling firms lobbied the FASB to obtain a “fair-value”-based impairment rule to facilitate their ability to manipulate financial statements. I offer a more benign explanation and make some other observations about how this line of research could proceed in the future.     

The Role of Fair Value Accounting in Promoting Government Accountability

A key factor to improve the financial accountability of governments is the existence of a set of generally accepted financial reporting of standards, such as IPSAS issued by the IFAC, which seek to enhance information transparency. This paper examines the capability of fair value accounting to improve, through financial transparency, government accountability, analysing the possible effect of the implementation of this measurement basis on understandability, comparability and timeliness—three qualitative characteristics linked to the relevance of financial reporting. This paper further considers whether the difficulties involved in achieving FV estimations could affect government financial accountability. The findings indicate that FVA implementation could enhance accountability by improving understandability, comparability and timeliness in governmental financial reporting, although the use of objective measures to estimate the FV of assets is fundamental. In addition, the type of assets and the existence of an active market are crucial to improving the comparability of financial statements under FVA, whereas improving timeliness could be limited by the possibility of estimating FV measures in‐house.     

公允价值、技术与制度改革及会计国际化

文章针对公允价值在我国具体会计准则中运用的变化 ,分析了公允价值在我国运用的障碍 ,指出市场价格判断的脱离使公允价值计量缺乏了技术基础 ,而企业法人治理结构的缺陷 ,则是公允价值在我国运用的根本限制。文章认为 ,会计的国际化不单纯是技术规范的国际化 ,而更应该是技术规范改革与制度改革并进的过程。     

公允价值在新会计准则中的具体运用分析

公允价值是我国新会计准则引入的一项全新的计量方式,这种计量方式的产生与市场经济的发展密切相关。本文的主要内容,就是对公允价值的本质与内涵进行解析,了解公允价值在我国的产生背景,进而对其在我国新会计准则中的具体运用进行介绍和分析。     

In pursuit of legitimacy: A history behind fair value accounting

An examination of the history of attempts by regulators, practitioners and scholars from the mid nineteenth century to 2005 to establish an appropriate accounting measurement basis for financial reporting here leads to an evaluation of the likelihood of fair value accounting (FVA) practices becoming fully institutionalised. Using concepts drawn from theories of legitimation, it is shown here that historic cost accounting (HCA) only enjoyed an episodic legitimacy in the 1940s–70s and that prior and after this period mixed measurement incorporating market values is routinised. Although principles of FVA have been legitimised to an extent, it is argued here that this has resulted in the practice of mixed measurement bases being taken for granted.     

The Value Relevance of Equity Method Fair Value Disclosures

We assess the valuation implications of the fair value disclosures made for publicly traded securities accounted for under the equity method. We test the association between investors' stock price metrics and fair value disclosures while controlling for book values on a sample of 172 investor firm-years during 1993–1997. Our results indicate that the information in the fair value disclosures is incremental to the information provided by both an investment's equity method book value and equity method reported income. This suggests that there is nothing unique about investments in publicly traded common stock that involve significant influence that makes the fair value disclosures irrelevant for firm valuation.     

浅析澳大利亚公允价值及应用

本文阐述了公允价值在为经济决策提供有用信息中所扮演的角色,以及公允价值的五个缺陷,并分析了澳大利亚两家不同行业的企业对公允价值的应用.