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Article
Publication date: 6 January 2005

Abd. Ghafar b. Ismail, Roselee Shah Shaharudin and Ananda R. Samudhram

The 1988 Basle regulations are meant to synchronise banking regulations worldwide and add to the stability of the global banking system. Basle II, due to be released in 2006…

Abstract

The 1988 Basle regulations are meant to synchronise banking regulations worldwide and add to the stability of the global banking system. Basle II, due to be released in 2006, addresses some of the flaws in the 1988 accord. However, both versions do not close a loophole for managing earnings through discretionary adjustments of the loan loss provisions. Some researchers have found indications of income smoothing through loan loss provisions in banks, but others have concluded otherwise. All of these studies were conducted on banks outside of Malaysia. This study looks specifically at Malaysian banks, and uses a model based on bank‐specific and macroeconomic factors that are peculiar to Malaysia. It concludes that Malaysian banks do not smoothen income. The likely reason is that good governance in Malaysian banks is driven more by regulatory measures imposed by the authorities than stock market discipline. Thus bankers do not seem to be concerned with managing earnings to present a rosy picture to investors. However, from a macroeconomic perspective, stacking up loan loss provisions during good times will help to release more credit during downturns in economic cycles, helping to softwn the impact of recessions. Further research on whether Malaysian banks conduct capital management, to meet regulatory capital requirements, will help to shed more light on the behaviour of Malaysian banks.

Details

Journal of Financial Reporting and Accounting, vol. 3 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 29 June 2010

Ananda Samudhram, G. Sivalingam and Bala Shanmugam

The purpose of this paper is to discuss a framework of accounting theoretical bases that could promote research into little understood areas of human capital accounting.

2007

Abstract

Purpose

The purpose of this paper is to discuss a framework of accounting theoretical bases that could promote research into little understood areas of human capital accounting.

Design/methodology/approach

The possible forces that hinder greater disclosure of human capital‐based information are analyzed by reviewing several theoretical viewpoints that offer a framework of different possible reasons for the low frequency of human capital‐based disclosures.

Findings

The paper explores several possible reasons for the reluctance of firms to disclose greater amounts of human capital‐based information, from the perspective of relevant theoretical bases. The predominant reasons may differ in different circumstances, industries and environments.

Research limitations/implications

The paper explores theoretical bases that explain the barriers to widespread reporting of human capital‐based information. The theoretical bases discussed are not empirically validated.

Practical implications

The validation of the theoretical bases explored in this study, and the possible uncovering of new bases in the future through empirical studies, will enable academics, policy makers and accounting standard setters to better understand the reasons for the limited disclosures of human capital‐based information by listed firms to capital markets. This will help in the promulgation of widely accepted accounting standards for the disclosure of human capital‐based information, which address and overcome the forces that currently hinder the reporting of human capital‐based information.

Originality/value

This is the first paper that explores a framework of several pertinent theoretical viewpoints that specifically address the non‐disclosures of human capital‐based information to capital markets.

Details

Journal of Human Resource Costing & Accounting, vol. 14 no. 2
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 17 October 2008

Ananda Samudhram, Bala Shanmugam and Kevin Lock Teng Low

The purpose of this paper is to develop an analytical framework that links the expenditures on human capital to the resulting long‐term benefits, and thus provide a model for…

2818

Abstract

Purpose

The purpose of this paper is to develop an analytical framework that links the expenditures on human capital to the resulting long‐term benefits, and thus provide a model for reporting human capital on balance sheets. The framework identifies different kinds of accounting treatments for different kinds of human capital related expenses.

Design/methodology/approach

This paper sub‐divides expenditures related to human capital into four categories, based on the expenditure‐long‐term benefits relationships, using a Cartesian axes‐based approach.

Findings

The paper shows that a sub‐class of expenditures occur that are within the control of the organisation and provide economic benefits over several periods. As such, these expenditures can be capitalised. Furthermore, expenditures that do not provide long‐term benefits or result in lower productivity also exist. These need to be addressed by the management.

Research limitations/implications

This model needs to be formally field‐tested.

Practical implications

The analytical framework may be used in practice by managers for analysing the benefits of the different types expenditures on human capital. It can also be used by researchers to analyse the benefits of the expenditures on different types of intellectual capital and financial accounting standard setters to standardise the appropriate accounting treatments for different types of human capital related expenditures.

Originality/value

This is the first study that breaks down the human capital related expenditures into comprehensive categories based on the expenditures‐benefits relationships such that positive and negative intangibles are identified, and examines the financial accounting and strategic managerial accounting implications of both kinds of intangibles.

Details

Journal of Intellectual Capital, vol. 9 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

Content available
Article
Publication date: 29 June 2010

Robin Roslender

416

Abstract

Details

Journal of Human Resource Costing & Accounting, vol. 14 no. 2
Type: Research Article
ISSN: 1401-338X

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