Search results

1 – 10 of over 28000
To view the access options for this content please click here
Book part
Publication date: 24 October 2013

Zubeyir Kilinc, Hatice Gokce Karasoy and Eray Yucel

The composition of bank liabilities has captured a lot of attention especially after the global financial crisis of 2008–2009. It is argued that a compositional change in…

Abstract

The composition of bank liabilities has captured a lot of attention especially after the global financial crisis of 2008–2009. It is argued that a compositional change in non-core liabilities reflects the different stages of financial cycle. Banks usually fund their credits with core liabilities, which grow with households’ wealth, but when there is a faster growth in credits compared to deposits, the banks often resort to non-core liabilities to meet the excess demand for loans. This chapter analyses the relationship between non-core liabilities and credits in a small open economy, namely Turkey. It investigates the relationship under alternative settings and presents consistent evidence on a robust relationship between credits and non-core liabilities under all frameworks. The study also verifies that elevated demand for credit may induce some increase in non-core liabilities. Finally, the relationship between non-core liabilities and credit growth is also affirmed in the long run.

To view the access options for this content please click here

Abstract

Details

The Banking Sector Under Financial Stability
Type: Book
ISBN: 978-1-78769-681-5

To view the access options for this content please click here
Book part
Publication date: 15 August 2014

Martin Freedman, Jin Dong Park and Jorge Romero

This study investigates whether CEOs exercise discretion in recognizing environmental liabilities surrounding their turnover. Extant theories on the agency problem predict…

Abstract

This study investigates whether CEOs exercise discretion in recognizing environmental liabilities surrounding their turnover. Extant theories on the agency problem predict that outgoing CEOs tend to boost or maintain the reported earnings in their final years (“Horizon” problem or “Cover-up”) and incoming CEOs sacrifice the reported earnings in their transitions year (“big-bath”). We find empirical evidence that incoming CEOs recognize significantly higher environmental liabilities in their transition year compared to the following years, supporting the “big-bath” hypothesis. This finding provides evidence that CEOs use environmental liabilities as a tool of earnings management surrounding their turnover in an attempt to maximize their accounting-based compensation.

Details

Managing Reality: Accountability and the Miasma of Private and Public Domains
Type: Book
ISBN: 978-1-78052-618-8

Keywords

To view the access options for this content please click here
Article
Publication date: 26 June 2020

Edila Eudemia Herrera Rodríguez and Iván Andrés Ordóñez-Castaño

This research examines the likelihood that Panamanian and Colombian banks listed on their respective stock exchanges voluntarily disclose intangible liabilities based on…

Abstract

Purpose

This research examines the likelihood that Panamanian and Colombian banks listed on their respective stock exchanges voluntarily disclose intangible liabilities based on such variables as their size, profitability, indebtedness, age and growth. The presented findings concur with agency theory, signalling theory and the owner-cost theory.

Design/methodology/approach

The authors propose a probabilistic model to test the influence of size, profitability, indebtedness, age and growth on the disclosure of intangible liabilities. The dependent variable, the disclosure index, was constructed from a dichotomous approach using Harvey and Lusch's (1999) model, which has 24 characteristics, plus six that we added in our research. These were grouped into four categories: procedures, human activity, information and organisational structure.

Findings

Banks in Panama and Colombia with a larger size, higher profitability, lower age and higher growth are more likely to disclose more information about their intangible liabilities. However, indebtedness does not serve as a determinant of the disclosure of these liabilities, even though its relationship is negative.

Research limitations/implications

The limitation of the research was the voluntary disclosure of information about these liabilities on firms' websites.

Practical implications

The contributions of this research are as follows. First, we used an intangible asset disclosure methodology to verify the disclosure of intangible liabilities, in line with Harvey and Lusch's model, as well as providing another six indicators, thereby producing an extended model. Second, being the first empirical research to study the disclosure of intangible liabilities in Panama and Colombia opens a door to future research on this topic.

Social implications

This research provides a significant practical contribution to society because banks listed on public stock markets, understanding that undisclosed intangible liabilities lead to opportunity costs in their profitability, might tend to disclose more information, thus promoting greater transparency in the market.

Originality/value

The main contribution of this research is applying an intangible asset disclosure methodology to the disclosure of intangible liabilities, following Harvey and Lusch's (1999) model, as well as the creation of an expanded model.

Details

Journal of Applied Accounting Research, vol. 21 no. 4
Type: Research Article
ISSN: 0967-5426

Keywords

To view the access options for this content please click here
Article
Publication date: 17 April 2019

Ana Isabel Lopes and Laura Reis

This paper aims to examine pricing differences regarding contingencies presented in statements of financial position or notes, which are considered an area for creative accounting.

Abstract

Purpose

This paper aims to examine pricing differences regarding contingencies presented in statements of financial position or notes, which are considered an area for creative accounting.

Design/methodology/approach

The authors have chosen two countries with different cultural environments to test the exploratory study. The sample includes companies using the International Accounting Standard (IAS) 37, which requires recognition of provisions while contingent liabilities are only disclosed, implying different impacts from underlying judgement related with contingencies. The authors apply a regression model based on the Ohlson equity-valuation framework.

Findings

The most important conclusion is that market participants in both countries follow different patterns when incorporating information about provisions and contingent liabilities. More precisely, the results suggest that provisions are value-relevant, but incrementally less negative in Portugal. Contingent liabilities seem to have no value relevance. However, an exception exists for Portuguese companies having a risk committee board, in which case a significant market valuation of contingent liabilities is found and discounted in share prices. The existence of a risk committee corroborates the value relevance of this board, which is positively valued by market participants in both national cultures.

Practical implications

The findings may make a contribution to the IASB research project on the IAS 37 and possible amendments to it (suspended until the revisions to the conceptual framework are finalized) and to the IASB prioritization of communication effectiveness of financial statements to all users.

Originality/value

Value relevance of contingencies differentiating countries from two different national cultures and firms with a risk committee on the board of directors.

Details

Meditari Accountancy Research, vol. 27 no. 2
Type: Research Article
ISSN: 2049-372X

Keywords

To view the access options for this content please click here
Article
Publication date: 12 February 2018

Abdifatah Ahmed Haji and Nazli Anum Mohd Ghazali

The purpose of this paper is primarily to explore the extent of intangible assets and liabilities of large Malaysian companies. The authors also examine whether intangible…

Downloads
1840

Abstract

Purpose

The purpose of this paper is primarily to explore the extent of intangible assets and liabilities of large Malaysian companies. The authors also examine whether intangible assets and liabilities of a firm have similar or contrasting roles in firm performance.

Design/methodology/approach

Using a direct and straightforward measure of intangible assets and liabilities, the authors examine a large pool of data from large Malaysian companies over a six-year period spanning from 2008 to 2013.

Findings

The longitudinal analyses show a significant number of the sample companies, between 34 and 59.33 percent, have a consistent pattern of intangible liabilities. The authors also find firms with intangible liabilities have significantly underperformed financially than a control group of firms. In addition, the authors find that intangible liabilities have significant negative impact on firm performance whereas intangible assets have a contrasting positive impact on firm performance.

Research limitations/implications

One limitation of this study is that the authors have only used a single measure of intangible assets and liabilities. Albeit the measures used are straightforward and more objective, there could be other measures to capture intangibles.

Practical implications

The research findings have several theoretical as well as policy implications. Theoretically, the authors extend the resource-based view to the intangible asset-liability mix, affirming the crucial role of intangible resources in financial performance whilst introducing the unfavorable role of intangible liabilities in corporate financial performance. In terms of policy implications, the research findings provide initial empirical input to emerging calls for broader perspectives of intangibles, beyond intangible assets to include intangible liabilities, and therefore belong to an emerging paradigm toward the nature of intangibles.

Originality/value

This study documents a rare empirical account of the contrasting roles of intangible assets and liabilities in corporate financial performance.

Details

Journal of Applied Accounting Research, vol. 19 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

To view the access options for this content please click here
Article
Publication date: 22 May 2009

Mercedes Garcia‐Parra, Pep Simo, Jose M. Sallan and Juan Mundet

Most models of intellectual capital measurment equal intellectual capital with intellectual assets. Nevertheless, companies sometimes must incur liabilities to make…

Downloads
2243

Abstract

Purpose

Most models of intellectual capital measurment equal intellectual capital with intellectual assets. Nevertheless, companies sometimes must incur liabilities to make intellectual assets truly actionable. This fact suggests the existence of intangible liabilities. The aim of this paper is to refine the methods of assessment of intellectual capital by refining and extending the concept of intangible liabilities.

Design/methodology/approach

The paper consists of a literature review of prior conceptualisations of intangible liabilities, and an empirical exploration of the employer‐employee relationships that can originate intangible liabilities.

Findings

The results of the empirical research show that a non‐fulfilment of perceived obligations by the company might cause organisational members to refrain from deploying their organisational knowledge in organisational processes. Thus, these obligations can be conceptualised as intangible liabilities.

Research limitations/implications

The research has only explored intangible liabilities related to organisational members. Future research should explore the intangible liabilities that an organisation can incur with other constituencies, e.g. suppliers and clients.

Practical implications

Managers can improve their models of intellectual capital measurement taking into account not only the intangible assets, but also the intangible liabilities. Taking into account intangible liabilities should bring awareness of the conditions that might hinder the deployment of organisational knowledge.

Originality/value

The study brings a more refined, theoretically‐ and empirically‐based conceptualisation of intangible liabilities than those provided so far, aiding to develop a more robust theory of intellectual capital measurement.

Details

Management Decision, vol. 47 no. 5
Type: Research Article
ISSN: 0025-1747

Keywords

To view the access options for this content please click here
Article
Publication date: 20 February 2017

Thomas Schneider, Giovanna Michelon and Michael Maier

The purpose of this paper is to encourage accounting regulators to address diversity in practice in the reporting of environmental liabilities. When Canada changed to…

Downloads
1522

Abstract

Purpose

The purpose of this paper is to encourage accounting regulators to address diversity in practice in the reporting of environmental liabilities. When Canada changed to International Financial Reporting Standards (IFRS) in 2011, Canadian regulators asked the IFRS Interpretations Committee to interpret whether the discount rate to value environmental liabilities should be a risk-free discount rate. Old Canadian GAAP, and current US GAAP, allow for a higher discount rate, resulting in commensurately lower liabilities. International regulators refused to address this issue expecting no diversity in practice in Canada.

Design/methodology/approach

The focus is on a sample of Canadian oil and gas and mining firms. These domestic industries play a major role internationally and have significant environmental liabilities. The method is empirical archival, tracking firm characteristics and discount rate choice on transition to IFRS.

Findings

There is significant diversity in practice. About one-third of the sample firms choose a higher discount rate, avoiding a major increase in environmental liabilities on transition to IFRS. The evidence suggests that these firms have relatively larger environmental liabilities and that the discount rate decision is a strategic choice.

Research limitations/implications

The sample is based on one country and may only be reflecting local anomalies that have no broader implications.

Practical implications

Diversity in practice in accounting for environmental liabilities is not acceptable. Accounting regulators should act to create consistent and comparable reporting practice.

Social implications

Firms and managers facing larger environmental liabilities can choose to minimize environmental liabilities under IFRS, while it is the general public and society at large that bear the ultimate risk.

Originality/value

The paper pushes forward the debate on whether recognized environmental liabilities should reflect the interests of equity investors, or if other investors and stakeholders should be taken into account.

Details

Accounting, Auditing & Accountability Journal, vol. 30 no. 2
Type: Research Article
ISSN: 0951-3574

Keywords

To view the access options for this content please click here
Article
Publication date: 1 March 2015

Elizabeth Plummer and Terry K. Patton

This descriptive study shows how the government-wide financial statements can be used, with adjustments, to provide evidence on a state's fiscal sustainability. We compute…

Abstract

This descriptive study shows how the government-wide financial statements can be used, with adjustments, to provide evidence on a state's fiscal sustainability. We compute “adjusted total net assets” (AdjTNA), which equals a state’s assets (not including its capital assets) minus the state's liabilities and obligations, including the UAAL for pension and OPEB not reported on the Statement of Net Assets. AdjTNA provides information about a state’s ability to sustain its current fiscal structure, given its current financial resources. Primary results suggest that 40 states have a negative AdjTNA value, with a median -$6.7 billion per state (-$5,230 per household). Sensitivity analysis suggests 48 states have a negative AdjTNA value, with a median -$20.7 billion per state (-$16,200 per household). The paper discusses the important policy implications of these results.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 27 no. 2
Type: Research Article
ISSN: 1096-3367

To view the access options for this content please click here
Article
Publication date: 5 June 2017

Merike Kukk

The paper aims to investigate the impact of financial liabilities on households’ holdings of financial assets. The debt-to-income ratio of the household sector increased…

Abstract

Purpose

The paper aims to investigate the impact of financial liabilities on households’ holdings of financial assets. The debt-to-income ratio of the household sector increased from 75 per cent in 2000 to 99 per cent in 2010 in the euro area on average, and the rapid accumulation of household debt has induced the need to study how indebtedness affects the behaviour of households beyond their borrowing decisions.

Design/methodology/approach

The paper uses the first wave of the Household Finance and Consumption Survey from 2009-2010 covering euro area countries. The paper estimates a system of equations for households’ financial liabilities and assets, taking account of endogeneity and selection bias.

Findings

The results indicate that higher household liabilities are related to lower holdings of financial assets. The results are confirmed by a large number of robustness tests. The findings support the hypothesis that credit availability reduces precautionary savings as income shocks can be smoothed by borrowing, meaning fewer assets are held for self-insurance against consumption risk.

Practical implications

The results are obtained from a recession period when households faced aggregate shocks, whereas credit constraints were tighter than during good times. The implications of lower incentives to keep financial assets by indebted households is that they are actually more vulnerable to aggregate shocks, as they have fewer resources available when they are hit by a negative shock.

Originality/value

This is the first paper to investigate the effect of liabilities on financial assets using household level data. The paper takes a holistic view and models financial assets and liabilities jointly while controlling for endogeneity and selection bias.

Details

Studies in Economics and Finance, vol. 34 no. 2
Type: Research Article
ISSN: 1086-7376

Keywords

1 – 10 of over 28000