THE VALUE-RELEVANCE OF UK DIRTY SURPLUS ACCOUNTING FLOWS

Misgivings about dirty surplus accounting practices derive, in part, from two related concerns. Firstly, it has been argued that dirty surplus accounting might result in value-relevant items being reported within ‘dirty surplus flows’ rather than within earnings. Secondly, it has been suggested that the low transparency of dirty surplus flows might reduce investors' ability to recognize value-relevant items in a timely fashion. In this study, we address the first of these concerns. We examine UK stock returns and accounting flows accumulated over intervals of up to 20 years. We report evidence on the value-relevance of accounting flows which were excluded from ‘ordinary profit’ (i.e. accounting profit exclusive of extraordinary items) in the UK over the period from 1972 to 1992. Our tests provide strong evidence that UK ordinary profit is value-relevant and provide some evidence, on the basis of long-interval tests, that extraordinary items are value-relevant. There is little evidence that other flows excluded from ordinary profit are value-relevant, however. These finding may allay concerns that, by allowing value-relevant flows to bypass reported earnings, dirty surplus accounting practices have promoted undesirable ‘creative accounting’ activity by UK firms.     

TEMPORAL CHANGES IN THE DETERMINANTS OF MUTUAL FUND FLOWS

We examine how the relation between mutual fund performance and fund flows has changed over time by separating our sample into two periods (1978–87 and 1988–97). We document an increase in the flow‐performance asymmetry in the second period that exacerbates the adverse incentive for fund managers to increase portfolio risk. We develop a measure of the elasticity of fund flows with respect to performance, which filters out the confounding influence of greater aggregate fund flows in the second period and allows an examination of whether current investors place more emphasis on prior performance when selecting funds. We conclude that, though top performing funds are rewarded with greater fund flows in the second half of our sample, the change is due solely to the increase in aggregate fund flows and not to an increased reliance on performance by individual fund investors. JEL classification: G1, G2, L1.     

BALANCE SHEET ITEMS AS THE PRESENT VALUE OF FUTURE CASH FLOWS

This paper develops balance sheets assuming that assets are future service potentials, or future cash flows. All balance sheet items are the present (discounted) values of future cash flows. All future flows, whether receipts or payments, including transactions with shareholders, are accounted for on the balance sheet. Balance sheets are constructed on the basis of (1) full knowledge of the future, and (2) knowledge only of past flows, assuming that investment projects have zero net present value. Capital gains (losses) are recorded when events demonstrate that projects have positive (negative) net present value.     

强化人民币跨境流动监测监管

6月1日,国家外管局公布2011年全年年报。数据显示,2011年,外管局共查处外汇违法违规案件3488件,收缴罚役款5．03亿元人民币,较2010年增长1倍多。联合公安部门打击外汇违法犯罪活动取得重大进展,共破获39起地下钱庄、非法买卖外汇等违法犯罪案件,涉案金额合计717亿元人民币,破获案件数量创历史新高。     

加强管制 防范跨境资本流入风险

20世纪90年代以来,新兴市场经济体国家曾面临三轮大规模的资本流动。第一次是1996年到1997年东南亚金融危机期间;第二次是2006年到2008年上半年;第三次则是全球金融危机爆发后直到现在。我们发现,每一轮大规模的资本流动都埋藏着较大的金融隐患。