Whether proportionate consolidation (PC) or the equity method (EM) provides more informative financial statements has been controversial. This study uses data from listed companies in Hong Kong to investigate the value relevance of EM compared to PC during 2005-2008 when the local word-for-word...

Whether proportionate consolidation (PC) or the equity method (EM) provides more informative financial statements is a controversial issue. This study uses data from listed companies in Hong Kong to investigate the value relevance of the EM compared with PC during 2005-2008 when the local...

Im Jahr 2013 wurden die internationalen Rechnungslegungsstandards zur Abbildung von Gemeinschaftsunternehmen unter der Grundannahme angepasst, dass "[...] a change in financial reporting requirements might affect the cost of capital for individual entities by changing the [...] level of...

Vor Einführung von IFRS 11 besaßen Unternehmen ein Wahlrecht, ob sie ihr Gemeinschaftsunternehmen nach IAS 31 unter Anwendung der Quotenkonsolidierung oder der at-Equity Bilanzierung in ihrem Konzernabschluss abbilden wollten. Hinsichtlich beider Alternativen besteht ein seit langem geführter...

Vor Einführung von IFRS 11 besaßen Unternehmen ein Wahlrecht, ob sie ihr Gemeinschaftsunternehmen nach IAS 31 unter Anwendung der Quotenkonsolidierung oder der at-Equity Bilanzierung in ihrem Konzernabschluss abbilden wollten. Hinsichtlich beider Alternativen besteht ein seit langem geführter...

Whether proportionate consolidation (PC) or the equity method (EM) provides more informative financial statements is a controversial issue. This study uses data from listed companies in Hong Kong to investigate the value relevance of the EM compared with PC during 2005-2008 when the local...

Im Jahr 2013 wurden die internationalen Rechnungslegungsstandards zur Abbildung von Gemeinschaftsunternehmen unter der Grundannahme angepasst, dass "[…] a change in financial reporting requirements might affect the cost of capital for individual entities by changing the […] level of...

The article deals with transition from consolidated financial statements reported by proportionate consolidation method to these reported by equity method. IFRS 11 Joint Arrangements that fully superseded IAS 31 Interests in Joint Ventures become effective for financial statements for annual...

In case of negative amount of total equity can occur phenomenon ‘negative amount of investment’ in application of equity method, in its developed as well as undeveloped form. ‘Negative investment’ doesn’t comply with definition of asset in internationally respected standards of...

Although the usage of the equity method in the group where the investor exerts a significant influence becomes the standard procedure for the preparation of financial statements for a group, there are still many problems that are not addressed by the national legislation or in international...

We analyze public interventions to alleviate debt overhang among private rms when the government has limited information and limited resources. We compare the e¢ ciency of buying equity, purchasing existing assets, and providing debt guarantees. With sym- metric information, all the...

We analyze government interventions to recapitalize a banking sector that restricts lending to firms because of debt overhang. We find that the efficient recapitalization program injects capital against preferred stock plus warrants and conditions implementation on sufficient bank participation....

This article discusses some important components of how the accounting standards of consolidated financial statements have changed under FASB Nos. 141R and 160. Goodwill consists of both the parent and the noncontrolling interest. Noncontrolling interest includes goodwill and is treated as...

Standard equity valuation approaches (i.e., DDM, RIM, and DCF model) are derived under the assumption of ideal conditions, such as infinite payoffs and clean surplus accounting. Because these conditions are hardly ever met, we extend the standard approaches, based on the fundamental principle of...

We analyze government interventions to recapitalize a banking sector that restricts lending to firms because of debt overhang. We find that the efficient recapitalization program injects capital against preferred stock plus warrants and conditions implementation on sufficient bank participation....

We analyze government interventions to recapitalize a banking sector that restricts lending to firms because of debt overhang. We find that the efficient recapitalization program injects capital against preferred stock plus warrants and conditions implementation on sufficient bank participation....

The core argument of this paper is that International Financial Reporting Standards (IFRSs) are designed to provide relevant financial information to a wide range of users. The higher the quality of the information supplied by financial reporting, the better the outcomes of the decision-making...

This technical note explains stress testing for Portugal’s financial sector. A core part of the banking stress tests was the bottom-up exercise implemented by individual institutions. The bottom-up stress tests focus only on the impact of expected losses on indicators of profitability and...

This note assesses the risk profile of the nonfinancial equity investments of Spanish credit institutions (CIs), based on a market-risk approach. It assesses the main features of the situation and indicates the problems of CIs’ nonfinancial equity investments. It presents the evolution of...

Previous empirical studies derive the standard equity valuation models (i.e., DDM, RIM, and DCF model) while assuming that ideal conditions, such as infinite payoffs and clean surplus accounting, exist. Because these conditions are rarely met, we extend the standard models by following the...

This essay gives an overview of the special features of funding foreign subsidiaries. The central issue discussed is the possibility of funding by equity capital borrowed capital in the form of loans and trade accounts payable. Various envirenmental settings are introduced which lead to...