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Article
Publication date: 1 February 1993

Richard Dobbins

Sees the objective of teaching financial management to be to helpmanagers and potential managers to make sensible investment andfinancing decisions. Acknowledges that…

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5087

Abstract

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

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Management Decision, vol. 31 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 25 May 2012

George Emmanuel Iatridis and George Kilirgiotis

The purpose of this paper is to examine the incentives for fixed asset revaluation. The motives that are investigated include firm size, fixed asset intensity, firm…

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2459

Abstract

Purpose

The purpose of this paper is to examine the incentives for fixed asset revaluation. The motives that are investigated include firm size, fixed asset intensity, firm foreign operations and acquisitions, firm indebtedness and earnings management inclination.

Design/methodology

The study utilises logistic and linear regressions to test the hypothetical relations set up in the study. The categorisation of sample companies into those that perform asset revaluations and those that do not is based on the examination of firms’ annual reports.

Findings

The findings of the study provide evidence that firm size is positively related to fixed asset revaluation. Firms with foreign operations, with low fixed assets, and with high debt capital needs are more likely to perform fixed asset revaluations. This is also the case for firms that carry out acquisitions. The study also shows that fixed asset revaluation is negatively related to earnings management.

Research limitations/implications

Firms that revalue their fixed assets should examine the signals that are likely to be conveyed to investors about their managerial ability and financial prospects. Firms would tend to revalue their fixed assets when it is likely to result in maximum favourable financial consequences. Future research should investigate the possible opportunism in firms’ behaviour, as well as the stock market reaction to fixed asset revaluations.

Originality/value

The paper is useful for investors and financial analysts, as it sheds light on the motives for fixed asset revaluations. The reporting of asset values based on fair values would assist them in making unbiased predictions about firms’ future performance. The paper gives insight about the financial attributes of firms that perform fixed asset revaluations. For example, firms with capital needs would be inclined to undertake a fixed asset revaluation in order to reinforce their financial position.

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Journal of Applied Accounting Research, vol. 13 no. 1
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 1 April 2017

Yaotai Lu

U.S. state governments own a large array of fixed assets and lease a great number of parcels of private real properties for public uses. The purpose of this paper is to…

Abstract

U.S. state governments own a large array of fixed assets and lease a great number of parcels of private real properties for public uses. The purpose of this paper is to explore the public asset management system of the U.S. state governments. First, this paper analyzes the major, current public asset management systems and the public procurement systems created by the Organization for Economic Co-operation and Development and the U.S. Government Accountability Office. Based on the analysis, this paper constructs a comprehensive public asset management system that consists of six cornerstones. Second, this paper verifies the comprehensive public asset management system using the data collected from thirty-seven surveyed state governments. The data analysis demonstrates that the comprehensive public asset management system is supported. However, each cornerstone of the comprehensive public asset management system presents different strengths. Third, this paper suggests that further research may delve into particular areas of capital asset management at the state government level to identify critical issues and to provide appropriate resolutions.

Details

Journal of Public Procurement, vol. 17 no. 4
Type: Research Article
ISSN: 1535-0118

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Article
Publication date: 1 November 2006

J.O. Kehinde and T.O. Mosaku

The paper aims to report the research findings on the assets structure of medium‐sized building construction contracting firms in Nigeria and its implications on their operation.

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1246

Abstract

Purpose

The paper aims to report the research findings on the assets structure of medium‐sized building construction contracting firms in Nigeria and its implications on their operation.

Design/methodology/approach

The survey approach was adopted for the study. Two sets of data were collected: secondary source data from audited financial statements and primary source data using a structured questionnaire administered to management personnel of contracting firms. Descriptive statistical analysis and ratio analysis were employed for data analysis.

Findings

The results show that the assets structure of these firms comprise of fixed assets being less than half of the total assets, which imply that a greater portion of the total assets is current assets (held mainly as account receivables that sometimes may not be available within one year). There is generally a low investment in fixed assets from earnings over the years. The assets structure of these firms could impact on their ability to compete successfully on some project types especially where hiring options for plant and equipment are unavailable.

Originality/value

The research provides information on the assets structure of the medium‐sized building construction contractors in Nigeria. The study points to the need for adoption of a more proactive approach by building contractors in the face of a fluctuating workload.

Details

Engineering, Construction and Architectural Management, vol. 13 no. 6
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 26 April 2011

Konstantinos J. Liapis and Elena P. Christodoulopoulou

The purpose of this study is to identify how different Generally Accepted Accounting Principles (GAAP) influence property management. The study is based on two basic…

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3294

Abstract

Purpose

The purpose of this study is to identify how different Generally Accepted Accounting Principles (GAAP) influence property management. The study is based on two basic accounting principles for the valuation of assets: fair value and historical cost. The study focuses on land and buildings as a main part of the total fixed assets of a company. It uses the framework of the Greek real estate market as an experimental setting where the principles of historic cost and fair value accounting can be compared.

Design/methodology/approach

The topic is approached using an integration of fixed assets into four main portfolio categories: own used; investments; held for sale assets; and inventories. According to this framework the study examines the accounting treatments under International Financial Reporting Standards (IFRS), US GAAP and Greek GAAP for each portfolio transaction and analyses the impact of accounting entries to equity and profit and loss account.

Findings

The study results to a comparative analysis of the different studied GAAP and tries to establish a purchase price allocation method for property acquisition.

Originality/value

The contribution of this article is that it surveys principles, literature and practice about the above issues from a critical perspective, and presents a way to managing and monitoring real estate investments, using logical decision trees, from an accounting point of view.

Details

Journal of Property Investment & Finance, vol. 29 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 April 2001

Timothy Eccles and Andrew Holt

The paper proposes to outline the rules, regulations and generally accepted accounting principles that must be followed when recognising and valuing property in UK…

Abstract

The paper proposes to outline the rules, regulations and generally accepted accounting principles that must be followed when recognising and valuing property in UK financial statements. Its aim is to give the professional surveyor or corporate real estate adviser a clear understanding of the underlying principles involved and also the rules and conventions that must be followed. A plethora of new regulations has led to a range of new practices that must be understood by those advising upon corporate property matters. Not least of the reasons are the direct effects property matters now have upon balance sheets and profit and loss accounts. The aim of this paper is to offer corporate real estate managers an overview of the accounting framework in which they must offer advice to businesses. Traditionally, non‐property companies have tended to relegate property matters to advisers, who found themselves excluded from the key strategic decision‐making processes of the company, despite the large amounts of capital frequently tied up in their premises. The rise of facilities management and new forms of serviced office structure began to increase awareness of the issue. However, recent changes to accounting standards by the Accounting Standards Board (ASB) will impact directly upon the balance sheet and profit and loss account. In short, property issues directly impinge upon a business’s ability to report profits. Even so, relatively few property‐related views were put forward as part of the consultation process in the creation of these new standards. The area that has achieved most notice recently has been desire for accurate and consistent valuation and depreciation of assets ‐ including the management and maintenance of properties, and the selection of the property valuer. The basic premise behind such changes was to make accounts more visible and to demand clear logic and rationality of sensible business decisions. The paper deals solely with firms operating as manufacturers or service providers, with no interest in their property except as a place to do business, and an asset held as part of that business. Neither investment properties nor leased properties are discussed here, for reasons of space.

Details

Journal of Corporate Real Estate, vol. 3 no. 2
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 1 May 1987

1.1 What Are Accounts For? Overview The purpose of accounts is to reveal performance in the conduct of a business or other activity concerned with use of economic…

Abstract

1.1 What Are Accounts For? Overview The purpose of accounts is to reveal performance in the conduct of a business or other activity concerned with use of economic resources (e.g. a club). It is thus a matter of stewardship. Although, like economics, it is necessary in accounting to use money as a measure of performance, it is concerned with the individual organisation rather than with economic phenomena as a whole.

Details

Management Decision, vol. 25 no. 5
Type: Research Article
ISSN: 0025-1747

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Case study
Publication date: 6 November 2017

Sandeep Goel

Accounting and Finance.

Abstract

Subject area

Accounting and Finance.

Study level/applicability

Postgraduate/graduate.

Case overview

This paper aims to analyse the fixed assets management of Larsen & Toubro Ltd (L&T), a leading Indian construction company for sufficiency and efficiency, and explore its future growth prospects in relation to its capital investments. It also investigates whether the global crisis in 2008 had any impact on the development plans of the company for future orientation as the global recession affected companies in various sectors worldwide. It specifically aims to find out whether L&T was in a better position to face the situation in the industry.

Expected learning outcomes

Expected learning outcomes are as follows: to learn and apply the concept of fixed assets management in a business organization; to evaluate the impact of fixed assets management on the profitability of the company; to appreciate the importance of fixed assets management efficiency in a business organization; and to illustrate the use of financial crisis on the growth prospects of a business.

Supplementary materials

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Subject code

CSS 1: Accounting and finance.

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Article
Publication date: 1 January 2008

Keith Hooper, Rowena Sinclair, Doris Hui and Kelvin Mataira

Charities are becoming recognised as playing an important part in communities by furthering government's social objectives through increasing support to disadvantaged…

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2389

Abstract

Purpose

Charities are becoming recognised as playing an important part in communities by furthering government's social objectives through increasing support to disadvantaged members of society. As charities multiply in number, it becomes increasingly difficult for fund providers and contributors to determine which charity to support. In New Zealand there is a move towards providing public access to the financial accounts of charities to assist stakeholders in their decision making and to enhance transparency in charities. However, this assumes that these financial accounts are understandable by all stakeholders. This paper aims to identify four problems that limit the way forward for financial reporting by New Zealand charities.

Design/methodology/approach

The first section of the paper comprises a review of the literature on charities' financial accounts with a particular focus on the four problems identified above. The paper then reports the results of eight interviews with charitable organisations, auditors and academics that have expertise in charity financial reporting, with a particular emphasis on the four identified problems.

Findings

There was agreement that unresolved, these four problems could limit the way forward in financial reporting by New Zealand charities. Some recommendations are proposed that suggest a way forward with regard to these problems, so that the users of the financial reports of charities may benefit.

Research limitations/implications

Highlights a need for further research into these problems to identify the feasibility of the proposed recommendations.

Originality/value

The enactment of the Charities Act 2005 in New Zealand and its requirement to include financial accounts on a publicly available register has raised the profile of the financial reports of charities. However, there has been limited research into the financial reporting by New Zealand charities, so this paper is a timely evaluation of four specific problems that could limit the way forward of financial reporting by New Zealand charities.

Details

Managerial Auditing Journal, vol. 23 no. 1
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 August 1978

Niall Lothian

In our overview of the issues involved in inflation accounting we concentrated on two major problems, fixed assets and stock (which were analysed in depth in chapter two)…

Abstract

In our overview of the issues involved in inflation accounting we concentrated on two major problems, fixed assets and stock (which were analysed in depth in chapter two). We explicitly omitted any analysis of the other significant group of items in most balance sheets, monetary items; they are the liquid or near liquid assets and liabilities which a firm possesses such as cash, debtors, creditors, loan capital and so on. Agreement amongst accountants on how inflation affects monetary items is even more remote than agreement on fixed assets and stock. We have seen that the reformers of historical cost support one or other of two rival methods, current purchasing power or current cost accounting. Although the issues surrounding the treatment of monetary units are affected by whichever method is selected for the conversion of the main accounts (CPP or CCA), one cannot really polarise the discussion on monetary items so easily because, of the methods proposed so far for dealing with them, there has been a considerable element of overlap between the various treatments. This essay attempts to set down the main strands of the argument—it avoids deliberately the more esoteric topics of the debate which are explored by a few of the later contributors.

Details

Management Decision, vol. 16 no. 8
Type: Research Article
ISSN: 0025-1747

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