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We present an approach for pricing American put options with a regime-switching volatility. Our method reveals that the option price can be expressed as the sum of two components: the price of a European put option and the premium associated with the early exercise privilege. Our analysis demonstrates that, under these conditions, the perpetual put option consistently commands a higher price during periods of high volatility compared to those of low volatility. Moreover, we establish that the optimal exercise boundary is lower in high-volatility regimes than in low-volatility regimes. Additionally, we develop an analytical framework to describe American puts with an Erlang-distributed random-time horizon, which allows us to propose a numerical technique for approximating the value of American puts with finite expiry. We also show that a combined approach involving randomization and Richardson extrapolation can be a robust numerical algorithm for estimating American put prices with finite expiry.

This study aims to fill the gap in previous research that focuses on the superficial aspects of equity crowdfunding (ECF) campaigns and financial practices by examining financial literacy aspects, such as due diligence and valuation, in terms of factors that influence Japanese individual investors' investments in ECF.

The status of information disclosure in ECF campaigns is checked. In addition, the feasibility of the initial due diligence and valuation using this information is verified. Specifically, the lack of financial literacy hypothesis is developed and (1) expected market capitalization in the final fiscal year of the business plan and (2) expected returns on investment (IRR: internal rate of return) are estimated.

ECF campaigns in Japan disclose information equivalent to that obtained by professional venture capitalists. Analysis of the disclosed business plan allows for initial due diligence and valuation. By contrast, due diligence reveals that some projects are unlikely to be listed even if their business plans are met, and others have low IRRs. In addition, a stock acquisition rights project, in which even professional investors are unable to calculate IRRs, is completed at the same rate as a common stock project; this suggests that individual investors lack financial literacy.

Analyzing ECF from financial literacy aspects, such as due diligence and valuation, is unique. Such aspects are essential for private equity investments but have not been addressed in previous studies.

Testing a total of five hypotheses, the paper contributes to overall comparison of the two regimes, as it scrutinises whether these improvements have helped regulate this sector. Although it appears that, for the first time, International Financial Reporting Standards (IFRS) had a more timely effect than US Generally Accepted Accounting Principles (GAAP), multiple parameters must be taken into consideration. The banking system has additional rules that may affect financial statements, such as the Basel Accord which sets many policies closely related to the IFRS, such as deferred tax credits. In this way, this paper aim to enrich the results of these decisions, and illuminate aspects of amendments to IFRS and US GAAP in light of the crisis. Focussing on the financial sector, the author sought to critically evaluate their reactions, and to question some of their fundamental rules in practice. This is vital for accounting researchers and analysts, allowing for the first time to compare IFRS performance between Europe and the US, and make better investment evaluations.

The study sought to detect whether IFRS and US GAAP protected firms from abnormal sales arising from the outbreak of the crisis, whether the reclassification option under IFRS was an answer to the crisis, and whether IFRS and US GAAP succeeded in regulating shadow banking through their amendments. Therefore, it processes five hypotheses. In order to detect the effects of the crisis on accounting regimes, the analysis focused only on companies from the financial sector composed of the banking industry, insurance companies and shadow banking. The author included firms from Australia, Germany, Greece, the UK and the US, and collected information on 679 financial institutions for the period 2009–2013. The author settled on these time frames because the author aimed to capture IFRS performance surrounding the crisis effects in 2008 and the amendments that followed. In this way, the author applied quantitative methods using only numerical data over a given period.

The results suggest that the reclassification option was successful, helping firms to perform better amid the crisis, indicating that the manipulation of the crisis was appropriate. It seems therefore that US GAAP should have activated this option for US firms. However, the US may not have hurried to act because its banking sector seemed to recover more quickly than in Australia and Europe. Either way, both regimes need to consider speculative market cases that might have appeared during the crisis, as the author have detected cases of abnormal returns. Finally, concerning regulation of the shadow banking sector, the results seem to be encouraging only with regard to the latest improvements and only for all countries examined.

The project contributes to debate on the reactions of both IFRS and US GAAP during and after the economic crisis. For this, it addresses several questions to investigate the performance of the financial sector under both regimes, identifying possible additional effects and considerations. More specifically, it answers if the fair value orientation actually contributes to the financial crisis through contagion effects, while it addresses additional questions. Have these two global accounting regimes succeeded in overcoming the consequences of the crisis? Have amendments and the introduction of new standards to IFRS and US GAAP achieved regulation of shadow banking? Which of the two has performed better? As aforementioned, the analysis focused only on companies from the financial sector composed of the banking industry, insurance companies and shadow banking firms from Australia, Germany, Greece, the UK and the US, for the period 2009–2013.

This study aims to evaluate the presence of abnormal returns due to stock splits or reverse stock splits in the Brazilian capital market context.

The event study technique was used on data from 518 events that occurred in a 30-year period (1987–2016), comprising 167 stock splits and 351 reverse stock splits.

The results revealed the occurrence of abnormal returns around the time the shares began trading stock splits or reverse stock splits at a statistical significance level of 5%. The main conclusion is that stock split and reverse stock split operations represent opportunities for extraordinary gains and may serve as a reference for investment strategies in the Brazilian stock market.

This study innovates by including reverse stock splits, as the existing literature focuses on stock splits, and by testing two distinct “zero” dates that of the ordinary general meeting that approved the share alteration and the “ex” date of the alteration, when the shares were effectively traded, reverse split or split.

Ageing populations induce needs to adapt existing housing. With ageing, the number of frail old people, who require assistance in daily life, is also increased. Converting existing housing into assisted living enables them to remain in their community while receiving necessary support and care. The purpose is to investigate whether post-war mass housing is spatially appropriate for adaptation into group homes for older people.

The research material is attained from Finland. Spatial requirements for group homes are drawn from 130 units built or renovated during 2000–2015. Spatial characteristics of mass housing are mapped from 105 apartment buildings built in the 1970s. The latter are matched with the former by comparing the connectivity of layouts, sizes of units and the numbers and sizes of individual spaces.

Group homes typically utilize a linear layout, which can easily be created in apartment buildings. Individual spaces of a group home fit apartment buildings effortlessly. Whole group home units mostly prove to be spatially feasible but result in looser dimensioning than is typical in existing units. The mass housing stock can be considered a spatial reserve for adaptation into group homes.

This is the first study to employ a large-scale, multi-case spatial mapping approach to analyse the adaptability properties of mass housing into assisted living. The findings pertain primarily to the Finnish context, but a methodology is presented which can be applied to other countries and also to other spatial functions.

New service businesses carry opportunities for industrial companies. The different cost management and management control implications of those service businesses deserve attention, which is a widely under-researched area in management accounting and control literature. Digital twins could hold potential in unveiling and supporting those new service business opportunities, as a unique approach of this paper. Thus, the purpose of this paper is to examine the possibility and potential for creating a digital twin of a service, especially to unveil the management accounting and control implications of the digital twin in developing new service businesses.

This paper investigates the potential of a digital twin in unveiling cost and control implications of new service businesses by examining the characteristics of a digital twin in the service business development context. The paper use an in-depth interventionist case study, where the designed animations illustrate the possibilities of a digital twin of a service. The animations showing the service process characteristics were first used as a communication tool and eventually those animations were actively used in customer cases for different purposes. This motivated the idea for examining the implications of such animations representing a digital twin of a service.

The paper provides empirical insights regarding the potential for developing and using a digital twin of a service for different cost management and management control purposes. The digital twin of a service may include all main details of a new service offering, simulating the functionality of a service, hence making the performance and the implications of the new service concept clear for all the stakeholders. The digital twin of the service enables defining the processes, setting targets and helps communication about the value generation. Thus, they represent a significant toolkit for the management accounting and control function of the manufacturers.

This paper is among the first attempts to understand the digital twin of the service. The paper is unique in providing financial and control implications of digital twins also in the context of service business development. The in-depth interventionist approach enabled an exceptional exploration process on the subject. The article paves the way toward further research on managing the digital twins of services in the future.

The purpose of this study is to develop new type of reverse mortgage contract. How to provide adequate services and housing for an increasing number of people that are dependent on the help of others is a crucial question in the European Union (EU). The housing stock in Europe is not fit to support a shift from institutional care to the home-based independent living. Some 90% of houses in the UK and 70%–80% in Germany are not adequately built, as they contain accessibility barriers for people with emerging functional impairments. The available reverse mortgage contracts do not allow for relocation to their own adapted facilities. How to finance the adaptation from housing equity is discussed.

The authors have extended the existing loan reverse mortgage model. Actuarial methods based on the equivalence of the actuarial present values and the multiple decrement approach are used to evaluate premiums for flexible longevity and lifetime long-term care (LTC) insurance for financing adequate facilities.

The adequate, age-friendly housing provision that is appropriate to support the independence and autonomy of seniors with declining functional capacities can lower the cost of health care and improve the well-being of older adults. For financing the development of this kind of facilities for seniors, the authors developed the reverse mortgage scheme with embedded longevity and LTC insurance as a possible financial instrument for better LTC services and housing with care in assisted-living facilities. This kind of facilities should be available for the rapid growth of older cohorts.

The numerical example is based on rather crude numbers, because of lack of data, as the developed reverse mortgage product with LTC insurance is a novelty. Intensity of care and probabilities of care in certain category of care will change after the introduction of this product.

The model results indicate that it is possible to successfully tie an insurance product to the insured and not to the object.

The introduction of this insurance option will allow many older adult with low pension benefits and a substantial home equity to safely opt for a reverse mortgage and benefit from better social care.

While currently available reverse mortgage contracts lapse when the homeowner moves to assisted-living facilities in any EU Member State, in the paper a new method is developed where multiple adjustments of housing to the functional capacities with relocation is possible, under the same insurance and reverse mortgage contract. The case of Slovenia is presented as a numerical example. These insurance products, as a novelty, are portable, so the homeowner can move in own specialised housing unit in assisted-living facilities and keep the existing reverse mortgage contract with no additional costs, which is not possible in the current insurance products. With some small modifications, the method is useful for any EU Member State.

The current study aims to examine the impact of two black swan events on the performance of six stock markets in Gulf Cooperation Council (GCC) economies (Abu Dhabi, Bahrain, Dubai, Oman, Qatar and Saudi Arabia). The two selected black swan events are the US Mortgage and credit crisis (Global Financial Crisis of 2008) and the COVID-19 pandemic.

The performance of all the six stock markets are represented by their return and price volatility behavior, which has been measured by applying ARCH/GARCH model. The comparative analysis is done by employing mean difference models. The data is collected from Bloomberg on a daily frequency.

The response of two black swan events on the GCC stock markets has been heterogenous in nature. During the financial crisis, the impact was heavily felt on most of the stock markets in the GCC countries. It is revealed that the financial crisis had a negative significant impact on four of the six countries. Whereas during the COVID-19 crisis, it is revealed that there is no significant impact on four of the six selected stock markets. The positive significant impact is felt on two stock markets, namely, the Abu Dhabi stock market and the Saudi stock market.

The present investigation attempts to fill the gap in the literature on the intended topic because it is evident from the literature on the chosen subject that no study has been undertaken to evaluate and contrast the impact of the GFC crisis and COVID-19 on the GCC stock markets.