Search results

1 – 10 of over 33000
To view the access options for this content please click here
Article
Publication date: 1 October 2004

Z.Y. Sacho and H.C. Wingard

This paper investigates the debate as to whether employee share options (ESOs) should be expensed in an entity’s financial statements as required by the IASB’s IFRS 2 …

Abstract

This paper investigates the debate as to whether employee share options (ESOs) should be expensed in an entity’s financial statements as required by the IASB’s IFRS 2 – Share‐based payment (2004). The paper presents arguments for and against expensing ESOs, demonstrating that compensation of employees via ESOs is a bona fide expense in terms of the recognition and measurement criteria of the IASB Framework. It concludes that, the substance of an ESO transaction is that the entity pays an employee for his services, albeit with a different financial instrument. Consequently, the accounting treatment of such compensation should be the same as for any other payment of services of an employee.

Details

Meditari Accountancy Research, vol. 12 no. 2
Type: Research Article
ISSN: 1022-2529

Keywords

To view the access options for this content please click here
Article
Publication date: 1 October 2005

Z.Y. Sacho and J.G.I. Oberholster

This article investigates the most appropriate accounting treatment for expensing the fair value of employee share options (ESOs) in financial statements. The debate…

Abstract

This article investigates the most appropriate accounting treatment for expensing the fair value of employee share options (ESOs) in financial statements. The debate centres around whether the grant date or the exercise date is the most appropriate date for determining the value at which the ESOs are eventually accrued within the financial statements. After examining accounting models for each of the above measurement dates, the article concludes that exercise date accounting best reflects the economic substance of the ESO transaction. Therefore, the IASB should consider revising its definition of equity to encompass only existing shareholders, leaving all other financial obligations to be classified as liabilities.

Details

Meditari Accountancy Research, vol. 13 no. 2
Type: Research Article
ISSN: 1022-2529

Keywords

To view the access options for this content please click here
Book part
Publication date: 11 September 2012

Erik Poutsma and Geert Braam

This study investigates the relationship between financial participation plans, that is profit sharing, share plans and option plans, and firm financial performance using…

Abstract

This study investigates the relationship between financial participation plans, that is profit sharing, share plans and option plans, and firm financial performance using a longitudinal panel data set of non-financial listed companies for the period 1992–2009 comprising 2,216 observations. In addition, it makes a distinction between financial participation plans that are narrow based, directed to top management and executives only, and broad based, targeted to all employees. The panel data also allow us to take into account time lag effects, as profit sharing is usually said to have short-term effects while stock options and share plans are more targeted to longer term impact. Our results show that broad-based profit-sharing plans and combinations of broad-based profit sharing and share plans are positively related with many firm financial performance indicators relative to companies without these plans. However, the results consistently show negative associations between both narrow- and broad-based option plans and firm financial performance.

Details

Advances in the Economic Analysis of Participatory and Labor-Managed Firms
Type: Book
ISBN: 978-1-78190-221-9

Keywords

To view the access options for this content please click here
Book part
Publication date: 6 June 2017

Erik Poutsma and Paul E. M. Ligthart

This chapter analyzes the determinants of adoption of sharing arrangements by companies. Using propositions from agency and strategic human resource management frameworks…

Abstract

This chapter analyzes the determinants of adoption of sharing arrangements by companies. Using propositions from agency and strategic human resource management frameworks predicting the adoption of sharing arrangements, we test the relationships with a large international dataset. The study finds that adoption of sharing arrangements is related to human capital investments, individual incentives, involvement practices, and human resource management practices and that adoption is affected by country differences.

To view the access options for this content please click here
Article
Publication date: 22 November 2011

Hong Nee Ang and Matthew Pinnuck

The purpose of this paper is to address the concern about the impact of accounting regulatory change pertaining to employee share options (ESOs) on earnings management…

Abstract

Purpose

The purpose of this paper is to address the concern about the impact of accounting regulatory change pertaining to employee share options (ESOs) on earnings management. Following Australia's adoption of International Financial Reporting Standards (IFRS) in 2005, companies are required to recognise the fair value of ESOs as expenses. Due to inherent imprecision in the estimate of ESO's fair value, the regulatory change from disclosure to recognition was widely claimed to potentially give rise to an alternative mechanism to manage earnings. This study provides empirical evidence on whether the regulatory change leads to earnings management problems.

Design/methodology/approach

This study uses the regulatory change in accounting for ESOs to provide a direct test of earnings management between disclosed versus recognised regimes for the same sample of firms. The sample consists of Australian firms from S&P/ASX300 for the period from 2003 to 2006.

Findings

The results show that, although the accounting regulatory change from disclosure to recognition may provide an alternative earnings management vehicle, there is no evidence of this occurring. There could be several reasons for this finding. First, the statistical tests lack power. Second, there are stricter audit tests on recognised amounts than on disclosed amounts. Third, given the concern of excessive pay and the close scrutiny of compensation, managers may have already understated ESO values in the disclosure regime. Finally, managers have limited time and resources and the effort involved in the adoption of IFRS in 2005 could have restricted the time available to manage earnings via the ESO reporting channel.

Originality/value

This study adds to the limited research on whether a change in accounting regulation for employee share options from disclosure to recognition gives rise to greater scope for earnings management. One reason for the lack of empirical evidence in the research is due to the problem of designing a test. Bernard and Schipper suggest that within‐firm studies have limitations for comparing the effects of recognition versus disclosure when the change is driven by an estimate becoming more reliable. A cross‐sectional study is also problematic due to self‐selection bias if firms can choose between disclosure versus recognition. This study circumvents potential design problems raised by Bernard and Schipper by setting a test using regulatory change which allows the test to be compared directly using the same company.

Details

Pacific Accounting Review, vol. 23 no. 3
Type: Research Article
ISSN: 0114-0582

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 2006

David O'Donnell, Mairead Tracey, Lars Bo Henriksen, Nick Bontis, Peter Cleary, Tom Kennedy and Philip O'Regan

Following Marx and Engels' identification of the “essential condition of capital”, the purpose of this paper is to begin an initial critical exploration of the essential…

Abstract

Purpose

Following Marx and Engels' identification of the “essential condition of capital”, the purpose of this paper is to begin an initial critical exploration of the essential condition of intellectual capital, particularly the ownership rights of labour.

Design/methodology/approach

Adopting a critically modernist stance on unitarist HR and OB discourse, and contextualised within a background on the stock option phenomenon and recent accounting regulation, the paper argues that the fundamental nature of the capital‐labour relation continues resiliently into the IC labour (intellectual capital‐labour) relation.

Findings

There is strong evidence that broad‐based employee stock options (ESOPs) have become institutionalised in certain firms and sectors – but the future of such schemes is very uncertain (post 2005 accounting regulation). Overly unitarist HR/OB arguments are challenged here with empirical evidence on capital's more latently strategic purposes such as conserving cash, reducing reported accounting expense in order to boost reported earnings, deferring taxes, and attracting, retaining and exploiting key elements of labour.

Research limitations/implications

Research supports the positive benefits of broad‐based employee stock ownership schemes. Further research on the benefits of such schemes and the reasons why they are or are not implemented is now required.

Practical implications

From the perspective of labour, nothing appears to have really changed (yet) in terms of the essential condition of intellectual capital.

Originality/value

This paper explicitly raises the issue of the ownership rights of labour to intellectual capital.

Details

Journal of Intellectual Capital, vol. 7 no. 1
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article
Publication date: 7 September 2010

P. Reeves Knyght, Alexander Kouzmin, Nada K. Kakabadse and Andrew P. Kakabadse

Employee ownership has attracted much attention across the globe. Whether affected by the global financial crisis (GFC), or not, this paper seeks to canvass what is known…

Abstract

Purpose

Employee ownership has attracted much attention across the globe. Whether affected by the global financial crisis (GFC), or not, this paper seeks to canvass what is known about employee ownership in neo‐liberal political economies.

Design/methodology/approach

This paper is a literature review, cross cultural analysis and critique.

Findings

The findings indicate future research directions.

Research limitations/implications

The paper suggests a reconsideration of organizational configurations for possible greater application in the future.

Social implications

The paper hightlights the re‐regulation of neo‐liberal markets.

Originality/value

The paper focuses on employee share ownership schemes.

Details

Management Decision, vol. 48 no. 8
Type: Research Article
ISSN: 0025-1747

Keywords

To view the access options for this content please click here
Article
Publication date: 1 July 1990

Michael J. Peel and Nick Wilson

Using a random sample of 49 UK engineeringcompanies, the influence of profit sharing, shareoptionschemes and the perceived degree ofemployee participation in decision…

Abstract

Using a random sample of 49 UK engineering companies, the influence of profit sharing, shareoption schemes and the perceived degree of employee participation in decision making on inter‐firm labour absenteeism rates are investigated. After controlling for a number of firm‐specific factors, suggested as theoretically appropriate in the extant literature, the key empirical results indicated that firms which had adopted sharing schemes appeared to experience significantly lower absenteeism rates than their non‐sharing counterparts.

Details

International Journal of Manpower, vol. 11 no. 7
Type: Research Article
ISSN: 0143-7720

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 1986

Harvie Ramsay, John W. Leopold and Jeff Hyman

I point out also that there are 1,800,000 more owner‐occupiers since 1979 — a policy fought tooth and nail by the Labour Party; that there has been a dramatic extension of…

Abstract

I point out also that there are 1,800,000 more owner‐occupiers since 1979 — a policy fought tooth and nail by the Labour Party; that there has been a dramatic extension of share ownership as with British Telecom and an increase in the number of employee share option schemes.

Details

Employee Relations, vol. 8 no. 1
Type: Research Article
ISSN: 0142-5455

To view the access options for this content please click here
Article
Publication date: 1 May 1990

M.J. Peel, R.E.V. Groves and M.W. Pendlebury

Research is currently being conducted at Cardiff Business School into the impact of wider share‐ownership/profit sharing and privatisation on various aspects of employee

Abstract

Research is currently being conducted at Cardiff Business School into the impact of wider share‐ownership/profit sharing and privatisation on various aspects of employee relations (see e.g. Poole and Jenkins, 1988; Wilson and Peel, 1989; Groves, Peel and Pendlebury, 1989; Peel, Pendlebury and Groves, 1989; Matthews, 1988). The purpose of the current paper is to outline a specific aspect of this research which is investigating the impact of share‐ownership/privatisation on the ‘financial awareness’ of employees; and to outline some preliminary evidence based on detailed questionnaire returns from leading UK quoted companies.

Details

Management Research News, vol. 13 no. 5
Type: Research Article
ISSN: 0140-9174

1 – 10 of over 33000