ACCOUNTING POLICIES FOR EXCHANGE GAINS AND LOSSES ON LONG-TERM MONETARY ITEMS

Accounting standards and exposure drafts on foreign currency translation have differed in their recommended treatment of unrealised exchange gains and losses on long-term monetary assets and liabilities of domestic firms denominated in foreign currencies. This paper compares the immediate recognition method (U.S. and U.K.) to the defer and amortise method (Australia and Canada) with respect to their effects on net income, asset and liability measurement. Reasons why management will be concerned with the financial statement effect of exchange rate changes are advanced and these, together with the empirical analysis of the competing accounting methods, help explain the evident support the Australian corporate sector has shown for the defer and amortise method.     

MANAGERIAL REMUNERATION AND ACCOUNTING FOR RECURRING EXTRAORDINARY ITEMS

The Australian standard on income statements (AAS 1) was recently amended to require that extraordinary items be non-recurring. Although the amendment applies from 1990, the Corporations Law requires that comparative financial statements for 1989, complying with the new rule, be included with the 1990 financial statements. Comparison of these with actual financial statements for 1989 indicates how the statements would have differed in 1989 if the standard had then required extraordinary items to be non-recurring. The differences are investigated to partially explain cross sectional differences in firms' classification criteria. Results imply that managers who are remunerated highly (relative to the magnitude of the earnings of the firm) prefer to classify gains as operating and losses as extraordinary.     

新企业会计准则系列——投资项目的分析方法一

近年来，一些上市公司利用长期投资进行资产交易获得高额投资收益仿佛已经成了习惯。一些不稳定的投资收益实际上是公司业绩的地雷，或许能支撑起公司暂时的繁荣，但却掩盖了公司经营与治理结构存在的问题，由此避免不了公司因投资收益剧减而业绩大滑坡的风险。因此，银行债权人应意识到，会计报表中的投资收益如果没有真实的业绩作背景，单凭利润表中的净利润说明不了任何问题。所以，本期我们将结合投资项目在会计报表中的披露，掌握投资项目对企业财务的影响。     

ACCOUNTING STANDARDS FOR THE PUBLIC SECTOR IN AUSTRALIA

The need for better financial reporting by public sector entities as a means towards greater accountability has been widely canvassed. This paper discusses the development and application of accounting standards in Australia in this context. The responses of the accounting profession, through its standard setting process, and of the Commonwealth and several State governments are described and the conclusion reached that these developments will mean significant improvement in the information content of public sector financial reports.     

新企业会计准则系列——新企业会计准则下的会计报表构成（一）

会计准则是规范企业会计确认、计量和报告行为,保证会计信息质量的会计法规,是会计人员在进行业务处职时的法律依据。     

COMPANY PARTICIPATION IN THE AUSTRALIAN ACCOUNTING STANDARDS SETTING PROCESS

Public accessibility to the records of standard setting organisations has encouraged research into the processes involved and the final outcomes. There is also a need to examine the standard setting process by enquiries directed towards the activities of external groups with an interest in the processes. This paper details the results of enquiries into the activities of listed Australian companies towards standard setting and provides an explanation of why some firms participate in the standard setting process and others do not.     

MONETARY ITEMS AND THE GEARING ADJUSTMENT: WHERE ARE WE?

As part of its attempt to make an operational Current Cost Accounting standard, the Australian Accounting Research Foundation has issued two exposure drafts dealing with the treatment of monetary items. This article evaluates these drafts with special reference being made to overseas developments. Crucial conceptual and operational flaws are found to be inherent in the Foundation's recommendations.     

EXTRAORDINARY ITEMS AND INCOME SMOOTHING: A POSITIVE ACCOUNTING APPROACH

This is an empirical study of single-period income smoothing which uses an incentives-based model to explain classificatory choices. An index is constructed to measure the smoothing effect of these choices. Weighted least squares regression results indicate that classificatory choices consistent with smoothing are more likely to be observed in firms with high earnings variability, high dividend payout, substantial managerial holdings of share options and diffuse share ownership. The existence of material scope for smoothing strengthens these findings. The model as a whole is statistically significant and, although the proportion of variability in smoothing explained is modest, it compares very favourably with other accounting choice studies. The relationship between smoothing and alternative earnings management strategies, including big bath accounting, is explored.     

ACCOUNTING FOR SEIGNIORAGE

This paper examines anomalies in the accounting procedures for the treatment of seigniorage on the Australian note and coin issue. It explains how the substitution of coins for notes leads to the unexpected result of reducing the budget deficit     

NEW CHALLENGES FOR MANAGEMENT ACCOUNTING: ISSUES IN HEALTH AND SOCIAL SERVICES

Social legislation from 1988 to 1990 significantly changed the old managerial framework in the field of social policy. It comprehensively split the previously fused functions of finance and provision. State agencies became purchasers of health, education and social care. Agencies providing these services were given devolved budgets or a completely independent and competing existence. These changes are a real challenge to management accounting as well as to managers. For these changes to produce an efficient outcome, much turns on the quality of the information on prices and costs, on the nature of the contracts and the quality of the contract compliance procedures and measures of performance. All are completely new to those working in the services. There are also inherent dangers that competition will take place on the basis of excluding the costly or needy groups. These are major technical and moral issues for the profession.     

ACCOUNTING FOR INSECURITY

This paper argues that modern systems of budgetary control are implicated in the exploitation and production of insecure forms of employment. The flexibility of direct labour is assumed at a very basic level in some of the core techniques of costing and budgetary control. Previous historical studies of the development of these forms of control, moreover, have shown that they were used to shift the costs of economic fluctuation from capital to labour as well as to encourage the efficient utilisation of human effort. In the light of these observations, it is to be expected that the use of budgetary targets which incorporate direct labour costs will: (1) be more prevalent where the workers are least able to resist the various forms of “flexibility”; and (2) encourage recourse to redundancies where the performance of business units within a company falls below expectation. The paper then tests these hypotheses against data from a recent survey of industrial relations practice in large UK companies. The results show, firstly, that there is a strong and positive association between the proportions of females and part-timers within the workforce and the use of unit labour costs and the direct labour cost/sales ratio as performance targets. Secondly, the use of return-on-investment (R.O.I.) targets is associated with the declaration of redundancies in business units which have failed to perform satisfactorily. For those to whom insecurity of employment constitutes a social problem rather than a managerial convenience to be celebrated as “flexibility”, these findings indicate that the accounting control systems typical of the modern company constitute part of the problem. The achievement of the long-standing trade union aim of security of income and employment will depend, in part, on changing these systems of control.     

THE INFLATION ADJUSTMENT OF CORPORATE ACCOUNTS: THE CASE OF MONETARY ITEMS

This paper investigates the sensitivity of the computed loss from holding monetary items to alternative numerical estimating techniques. Using data from 38 companies for the fiscal year 1980-81, we find that estimation of the loss from holding monetary items is robust with respect to the calculating technique utilized, provided the monetary base is broadly defined. The implications of this for “market model” type studies of the impact of inflation adjustments are discussed.