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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

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Article
Publication date: 1 April 2008

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

This paper investigates the factors influencing the future of the IASB, using as the point of departure, a review of its historical progression towards becoming the global…

Abstract

This paper investigates the factors influencing the future of the IASB, using as the point of departure, a review of its historical progression towards becoming the global accounting standard‐setting authority. It concludes that the IASB is an organisation vulnerable to (1) political lobbying of influential institutions, (2) US accounting authorities decision makers, (3) potential accounting scandals, and (4) cultural differences resulting in the misapplication of its standards around the world. Such factors should be borne in mind when charting the next steps for the IASB and in evaluating the comparability and quality of accounts produced under IFRSs around the world.

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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.

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

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Article
Publication date: 4 April 2016

Mahesh Joshi, Prem W. Senarath Yapa and Diane Kraal

The purpose of this paper is to examine the perceptions of professional accountants from three countries from the Association of South East Asian Nations (ASEAN) in order…

Abstract

Purpose

The purpose of this paper is to examine the perceptions of professional accountants from three countries from the Association of South East Asian Nations (ASEAN) in order to evaluate their perceived benefits associated with the adoption of International Financial Reporting Standards (IFRS) in their respective nations as well as the implications of these standards for the accounting and auditing professions in their country of practice. It also explores the extent to which the adoption of IAS/IFRS accounting standards have been supported by the state, media and local professional accounting bodies.

Design/methodology/approach

The study uses survey approach to seek perceptions of professional accountants in these three countries with a view to understanding their perceptions regarding the socio-economic issues related to the adoption of the IFRS and role of social institutions. The study also uses appropriate statistical tests for interpretation of the data.

Findings

The analysis of the data shows that accounting professionals in Singapore, Malaysia and Indonesia strongly supported IFRS adoption; their opinions did not differ significantly by place of training, experience or professional qualifications. Respondents agreed that their countries benefited economically from harmonisation with global accounting standards. The surveyed accountants believed that pressure from international agencies was instrumental in the adoption of IFRS in the region. The findings also show that governments, the media and professional accounting bodies have supported the adoption, communication and application of IFRS.

Originality/value

This is the first study examining the role of social and professional institutions in the adoption of the IFRS and one which also provides an inter-country comparison of accountant’s perspectives on adoption of the IFRS among three ASEAN countries.

Details

International Journal of Managerial Finance, vol. 12 no. 2
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 12 October 2012

Daniël Coetsee and Nerine Stegmann

The purpose of this paper is to examine the profile of accounting research in the two academic accounting research journals in South Africa (Meditari Accountancy Research

Abstract

Purpose

The purpose of this paper is to examine the profile of accounting research in the two academic accounting research journals in South Africa (Meditari Accountancy Research and SA Journal of Accounting Research) during the ten‐year period from 2000 to 2009.

Design/methodology/approach

The archival research method is applied, which analyses existing data (in this case the articles published in the South African (SA) accounting research journals) to come to research conclusions. The research method used to analyse the related articles in the SA accounting research journals is based on various international studies. The following dimensions are assessed: authorship; research field; the nature of the research; and research methods. Authorship is classified by institution, and the top seven authors by relative contribution are also identified. Both empirical and theoretical work are classified separately in different research methods.

Findings

These different dimensions provide a broad‐based review of the current profile of accounting research in South Africa.

Research limitations/implications

Other refereed academic articles in the field of accounting have been published in non‐accounting specific SAPSE‐approved journals. These articles are also excluded from the scope of this research since the journals in which they are published have not been established by accounting academics specifically.

Practical implications

The motivation for doing this research is to identify the current profile of accounting research in South Africa that could be used as a basis for future research‐related development.

Originality/value

Knowledge of the profile of accounting research in South Africa could provide opportunities for scholars to expand identified research areas and explore methods that are currently under‐developed in the South African accountancy research field. The paper also acknowledges the contributions by the most prolific authors in the identified journals.

Details

Meditari Accountancy Research, vol. 20 no. 2
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 11 April 2016

Christa Wingard, Jan Bosman and Bright Amisi

The purpose of this paper is to assess the influences on the due process of standard-setting with reference to the legitimacy of the financial reporting “soft law” that is…

Abstract

Purpose

The purpose of this paper is to assess the influences on the due process of standard-setting with reference to the legitimacy of the financial reporting “soft law” that is International Financial Reporting Standards (IFRS).

Design/methodology/approach

This study uses a literature review to analyse the governance structures, due process steps, staffing and funding of IFRS standard-setting activities. The study also uses descriptive statistics to analyse constituent participation during the development of two IFRS standards. The mean, median and standard deviation are used as measures of location and dispersion when analysing constituent participation.

Findings

IFRS governance structures are dominated by G20 countries. The International Accounting Standards Board (IASB) depends on international accounting firms, the European Commission and the G8 countries for its financial viability. Well-resourced national standard-setters, major international companies, international accounting firms and educational institutions are able to second their staff to the IASB thereby providing them with direct lobbying opportunities. The IFRS due process procedures provide opportunities for participation but actual participation is dominated by constituents from Europe with African and South American constituents the least active.

Practical Implications

IFRS are required or permitted in over 100 countries. The IASB, with no legal or formal mandate, is performing a task normally reserved for national standard-setters. The legitimacy of IFRS is questionable if the standard-setting due process is perceived as invalid.

Originality/value

The global financial crisis exposed weaknesses in the IFRS due process when the IASB amended IAS 39 without following the due process. African and South American standard-setters should take note that their lack of participation in IFRS standard-setting, coupled with the influence of powerful stakeholders on IFRS standard-setting, could result in standards not relevant for their regions.

Details

Meditari Accountancy Research, vol. 24 no. 1
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 4 November 2013

Denice Pretorius and Charl de Villiers

This study aims to investigate the post-implementation impact of expensing share-based payment transactions on basic earnings per share. In recent years, IFRS 2 was one of…

Abstract

Purpose

This study aims to investigate the post-implementation impact of expensing share-based payment transactions on basic earnings per share. In recent years, IFRS 2 was one of the most opposed and controversial standards issued by the IASB.

Design/methodology/approach

The sample relates to the period immediately after implementation (2006-2009) and consists of the 531 firm-year observations where share-based payments were present among Johannesburg Stock Exchange listed companies. The effect of share-based payments on basic earnings per share is assessed.

Findings

The findings of this study show a statistically significant impact on basic earnings per share, but the results are more modest than suggested by prior studies. The number of companies reporting a share-based payment expense increased over the five-year period 2005-2009.

Originality/value

The introduction of IFRS 2 caused small but not necessarily immaterial changes to the income profile of companies. This is important for analysts and general users of financial information who need to be aware of these changes. The results also suggest that IFRS 2 did not merely cause accounting policy changes, but has impacted on the way share-based payment transactions are used by companies.

Details

Meditari Accountancy Research, vol. 21 no. 2
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 8 February 2021

Anuradha Pandya, Wayne van Zijl and Warren Maroun

The objective of this research is to explore the challenges being encountered when applying and implementing fair value accounting requirements, focusing specifically on…

Abstract

Purpose

The objective of this research is to explore the challenges being encountered when applying and implementing fair value accounting requirements, focusing specifically on the determination of fair value per International Financial Reporting Standards (IFRS) 13: Fair value measurement (IFRS 13) in the South African capital market.

Design/methodology/approach

Data are collected from 20 detailed interviews, primarily with preparers and interpretively analysed to identify how individuals internalise the requirements of IFRS 13 and the challenges associated with its application. The researchers focus specifically on South Africa because of its status as a developing economy and, at the same time, its extensive experience in applying IFRS.

Findings

South African preparers appear reluctant to change from a conventional cost-based measurement approach to one grounded in fair value. Primary concerns include the perceived usefulness of fair value accounting and its conceptual appropriateness, given its perceived de-emphasis of the traditional stewardship role of financial reporting. Related challenges to the application of IFRS 13 include concerns about the cost of determining fair value; the inherent subjectivity of fair value measures and the practical difficulty of calculating fair values when markets are not efficient or where business environments are complex and dynamic where Level 1 inputs are not widely available for all assets and liabilities. These challenges encourage preparers to choose accounting policies, which minimise the use of fair value or apply the provisions of IFRS 13 legalistically.

Research limitations/implications

Data are collected from a group of respondents from a single developing economy. Additional research on the application of IFRS 13 in other developing markets will be required to conclude on the relevance of economic, cultural and social factors for the understanding and implementation of new accounting standards by practitioners.

Practical implications

Standard setters and regulators cannot assume that new accounting standards will be interpreted and applied as intended. Even when compliance with IFRS is mandatory, preparers have considerable discretion when it comes to operationalising accounting prescriptions. Unless the challenges raised by preparers are addressed, misapplication of IFRS is likely to continue.

Originality/value

The research makes an important empirical and practical contribution by providing primary evidence on the operationalisation of IFRS 13 in a novel setting. It complements earlier research which has focused primarily on the conceptual/theoretical dimension and on American and European perspectives.

Details

Journal of Accounting in Emerging Economies, vol. 11 no. 2
Type: Research Article
ISSN: 2042-1168

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