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The purpose of this study is to explore stakeholders’ perceptions on money creation and the impact of the accounting treatment for commercial banks’ money lending activity in Malaysia.

A phenomenological approach was used to examine the stakeholders’ perceptions through experience-sharing. A semi-structured interview approach was used to collect the data. Ten individuals from different stakeholder groups have been interviewed with their prior consent. For the data analysis, the current study adopted the inductive thematic approach.

Perceptions on money creation are influenced by the informants’ understanding and awareness of the research issue. Informants have agreed on the accounting treatment (debit loan and credit deposits) but explained the impact of this accounting treatment differently. The accounting treatment creates an opportunity for the commercial banks to create money as they want, and hence, the excess created money can create inflation and threat for the potential financial crisis. On the contrary, it is argued that money creation results from the systematic approach of the fractional reserve banking (FRB) in Malaysia. In addition, this money creation is not a threat to the economy as long as there is a strong controlling role of Bank Negara Malaysia (BNM).

Stakeholders’ perception indicates that awareness of the research issue can be a cause of crucial consequence for money lending activity. Moreover, this study may stimulate the chief regulatory body such as BNM, the central bank of Malaysia, to be more cautious in controlling the commercial banks’ money lending activity to prevent the potential future crisis. Furthermore, findings may help to explain the conflicting concept between the textbook explanation for FRB and current commercial banks’ money lending practice through the accounting treatment.

Monitoring and controlling of money creation and commercial banks’ money lending activity by BNM can be benefited from the stakeholders’ perceptions on this research issue. Because this is the first time study of the stakeholders’ perceptions on money creation and commercial banks’ money lending activity in Malaysia and hence, findings of this study may be worked as the input in the process of monitoring and controlling the money creation activity in Malaysia.

After the effective date of International Financial Reporting Standard (IFRS) 15, the accounting treatment of credit card rewards programmes (CCRPs) is no longer explicitly prescribed. Uncertainty regarding what constitutes faithful representation, and the inconsistent accounting practices observed, has created a need for guidance on the appropriate accounting treatment of CCRP transactions. Accounting theory has the potential to provide the foundation for this guidance. As a result, the objective of this study was to develop a theoretical model for the accounting treatment of CCRP transactions using accounting theory.

This non-empirical qualitative conceptual study utilised document analysis, focussing specifically on accounting theory, to construct an accounting treatment model.

Applying the relevant accounting theory (International Accounting Standards Board's (IASB's) Conceptual Framework), a theoretical model for the accounting treatment of CCRP transactions was developed, which emphasises the importance of understanding the economic phenomenon (the CCRP transaction) and determining how management views the transaction (in isolation as marketing or as an integral part of the credit card transaction).

Addressing the problem of accounting for CCRP transactions with reference to accounting theory (which is the main element of scholarly activity in accounting) distinguishes this study from previous research on the topic. The CCRP accounting treatment theoretical model could assist CCRP management in faithfully accounting for a CCRP transaction and reduce uncertainty and inconsistency in practice. Moreover, this study identified the procedures to be employed when using accounting theory to determine the appropriate accounting treatment of business transactions. These procedures could be employed by accountants when faced with other transactions not covered by specific accounting standards.

The purpose of this paper is to examine circumstances under which auditors subordinate their judgment. More specifically, the authors investigate factors associated with auditors’ propensity to accept client-preferred accounting methods that conform to accounting standards but do not faithfully represent the entity’s financial position, financial performance and cash flows.

Based on the theory of planned behavior (TPB), the authors developed a survey that was sent to auditors at a non-Big 4 audit firm.

Main results suggest that auditors tend to agree with a client’s preferred accounting method when they anticipate little fallout from this decision, they believe they can easily justify the method, and they perceive that colleagues, shareholders and creditors would also agree with the decision.

Results benefit auditing standard setters and regulators and are relevant for accounting institutes and audit firms because practitioners can learn about circumstances under which auditors subordinate their judgment.

This study contributes to the audit literature by using the TPB to identify factors associated with auditors’ judgment subordination. In addition, it applies the TPB in a context where a client-preferred accounting method is considered acceptable but is not the most appropriate in light of the audited entity’s specific circumstances.

This paper aims to critically examine the change in accounting treatment for goodwill pursuant to international financial reporting standards (IFRSs) by reference to the Australian reporting regime.

The paper discusses and compares the former Australian and the new IFRS treatments for goodwill. This comparison focuses on the advantages and potential complexities of the new method, with the aim of identifying the issues and challenges that preparers, independent auditors and those involved in corporate governance face in complying with the new requirements.

The paper highlights that the identification and valuation of cash‐generating units and goodwill require numerous assumptions to be made in estimating fair value, value in use and recoverable amount. Considerable ambiguity and subjectivity are inherent in the IFRS requirements.

Findings suggest that future research should examine how financial report preparers and corporate governance mechanisms are dealing with the complex change required by the new goodwill accounting treatment and how the many critical issues involved in auditing the resulting figures are being addressed.

The research has practical implications for financial report preparers in identifying the issues that must be addressed in complying with the international goodwill accounting treatment. In turn, the paper highlights conceptual issues of relevance to auditors in their role of providing assurance on the resulting accounting numbers. It also has implications for others involved in corporate governance, such as audit committee members, in emphasising the areas in which they should be providing oversight of the accounting judgments. These issues are of relevance in any reporting regime based on IFRSs.

While much has been written about the mechanics of the new goodwill accounting requirements, there has been a lack of critical research highlighting the many problems and ambiguities that will arise in the application of those rules.

In Private Finance Initiative (PFI) projects, value for money (VFM) tests and accounting treatment are distinct but related issues. VFM analysis should be concerned with total risk, not just with the sharing of risk, which dominates the accounting treatment decision. A framework is developed for logical thinking about what is meant by “best VFM” in the context of PFI projects. This involves consideration of the full set of alternatives, not an artificially diminished subset. The credibility of analytical techniques can be tarnished if they are misused to legitimate a predetermined decision. A reduction in construction risk may be a powerful source of VFM gains under PFI, but, under UK accounting regulation, this should not influence the accounting treatment decision. New complications about how VFM should be interpreted arise directly from the process of public sector fragmentation: affordability to the client is not necessarily the same as VFM for the public sector as a whole. Only public auditors, such as the National Audit Office, can gain access to PFI documentation on the conditions necessary for a comprehensive assessment of both accounting treatment and VFM. However, such studies require the kind of theoretical underpinning provided in this article, as otherwise the findings are likely to be ambiguous and hence vulnerable to rebuttal. In particular, VFM judgements must make explicit the basis of comparison on which they rest.

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.

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.

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

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.

This study aims to examine the impact of the emission allowances granted under California's cap‐and‐trade program (AB 32) – the first major program of its kind in the USA – on the balance sheets and income statements of the S&P 500. So far there has been little discussion of what a cap‐and‐trade program would mean for the US companies' financial statements.

The author states and tests an economic model of the relation between greenhouse gas emissions and financial statement variables at the individual company level and use this model to predict emission allowances and obligations for the S&P 500.

The author's analysis suggests that the average S&P 500 company's balance sheet and net income will be adversely affected under several different accounting treatments for emission allowances, with the greatest impacts in the utilities, energy, and materials sectors.

US and European regulators have yet to set a single standard for emissions accounting. Without a single standard, companies acting in their own interests may use diverse or unclear accounting treatments for similar economic benefits. This can raise the cost of capital and hurt investors.

This is the first study of which the author is aware to document how the emission allowances under the AB 32 cap‐and‐trade program will affect American companies' balance sheets.

The issue of goodwill has been debated in many countries throughout the world. Despite numerous efforts and the existence of accounting standards and exposure drafts issued by various professional bodies internationally, there is yet to be a universally accepted accounting treatment for goodwill. The opinion on this subject differs and changes frequently. The dichotomy of having to preserve prescribed recognition criteria on the one hand and the need to report useful information on the other has led to the many controversial issues debated on the subject of goodwill. This study centres around the international accounting treatment of goodwill in the past, present and future. This study reviewed some of the issues that surrounded the accounting for goodwill where it was found that goodwill accounting had faced many problems. Besides problems, this project also looks into the prospect of the accounting for goodwill in the cyberspace era and emergence of the knowledge‐based economy. This study confirms that controversy remains internationally with no solution in sight in the foreseeable future internationally.

The purpose of this paper is to investigate the market reaction to the accounting treatment of the marking‐to‐market of equity investments of Greek firms during the period 2002‐2004.

Using data for firms listed in the ASE, a treatment effects model of returns on control variables, the valuation adjustment and a dummy for the accounting treatment which is modeled as conditional to profitability, size and leverage.

It is found that firms chose to take valuation losses through equity but the market considered this treatment as a negative signal. The paper concludes that although market behavior is consistent with the efficient markets hypothesis, managerial behavior is more consistent with the mechanistic hypothesis.

This study contributes to understanding the factors that influence the accounting policy decisions of firms listed in the Athens Stock Exchange. In addition, this study contributes to evaluating the IASB's decision to give issuers of reclassify financial the ability to reclassify them.

Although the intention of the International Accounting Standards Board (IASB) is not to permit choices in the accounting treatment of similar transactions and events, International Financial Reporting Standards (IFRSs) still contain various choices of accounting treatment. Different accounting alternatives for similar transactions limit the comparability of financial information. Certain accounting policies result in differences in recognition, measurement and disclosures. This article identifies 16 such accounting policy choices and presents the descriptive empirical results on which accounting policies were in fact chosen by a sample of 157 South African listed companies, in cases where IFRSs allow a choice between alternative accounting policies. Disclosure of accounting policies is necessary for the users of financial statements to enable them to compare the financial statements of various entities in making economic decisions. The research also found a lack of disclosures relating to chosen accounting policies in limited cases.