Journal articles: 'Impairment of asset'

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Penner, James, Jerry Kreuze, and Sheldon Langsam. "Long-Lived Asset Impairments in the Shipping Industry and the Impact on Financial Statement Ratios: Comparing U.S. GAAP and IFRS Standards." International Journal of Accounting and Financial Reporting 3, no. 2 (October 11, 2013): 76. http://dx.doi.org/10.5296/ijafr.v3i2.4226.

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In this paper, we investigate asset impairment standards particularly as they relate to differences between United States generally accepted accounting principles (US GAAP) and international financial reporting standards (IFRS) for the impairment of long-lived assets in the shipping industry and the corresponding impact on financial statement analysis ratios. Our study provides evidence that return on assets and asset turnover ratios diverge significantly as a result of the difference between US GAAP and IFRS on asset impairments within the shipping industry. Reporting differences between US GAAP and IFRS can impede the comparability of financial reporting. Asset impairment accounting differences can have significant differences for companies reporting under these two accounting standards.

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Li, Yin Xiang. "The Construction Process and Effectiveness of the Asset Impairment Standard System in China." Advanced Materials Research 452-453 (January 2012): 374–78. http://dx.doi.org/10.4028/www.scientific.net/amr.452-453.374.

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During the past decade, criterion system of impairment of Assets has experienced a process from scratch and scattered to highly-developed in China. So far, “Accounting Standards for Enterprises No. eighth -- Asset Impairment ” has been implemented for nearly five years, and listed companies had compiled interim and annual reports during the 2007-2011 period which experienced a good condition overall. It is a significant breakthrough in the processing of accounting standards and accounting system, which constructs and consummates the system of asset impairment standard, require enterprises to reflect the value of the asset fairly and prevent inflated profits from property price foam. Introduction In recent years, the International and the domestic practice indicates that, in order to reflect the true value of the assets reliably, so as to improve the quality of accounting information, and reduce the uncertainty in decision-making, relevant accounting standards for recognition, measurement and presentation about asset impairment must be developed and implemented. During the past decade, criterion system of impairment of Assets experiences a process from scratch and scattered to highly-developed. In February 15, 2006, Ministry of Finance of the People’s Republic of China issued the "Accounting Standards for Enterprises No. eighth -- Asset Impairment" (Ministry of finance, PRC, 2006a), which regarding as the complete establishment of Chinese asset impairment standard system. Based on the experience of formulation and implement the accounting system and accounting standards, the Ministry of Finance drew some lessons from international accounting standards, and adopted the mode of “basic standard of impairment of Asset commanding other relative individual specific standards” to build asset impairment standard system, which has strong international significance.

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Gonin, V., E. Panchenko, E. Kibireva, and O. Nomokonova. "EFFICIENCY OF FIXED ASSETS REVALUATION AS A METHOD OF ASSET MANAGEMENT." Transbaikal state university journal 27, no. 3 (2021): 99–112. http://dx.doi.org/10.21209/2227-9245-2021-27-3-99-112.

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The method of asset management in connection with the development of the economic accounting system of financial and economic activity: accounting practices, practices, representation and compilation of accounting (financial) accounts of companies is described. This development is related to the use of international financial reporting standards, which are integrated into domestic practice. The aim of the study is to organize the effectiveness of fixed assets revaluation as an asset management method. To achieve the goal, the objectives are: to investigate the effectiveness of revaluation and impairment in the management of major funds; systematizing the overall stages of the method of assessing the value of fixed assets in revaluation and impairment; exploring opportunities to expand approaches to analyzing changes in balance sheet performance, financial performance reporting and financial performance in the asset management system. The object of the study is the cost of fixed assets. The authors have examined the method of revaluation and impairment, selected approaches to the study of the effectiveness of revaluation for the purpose of strategic and tactical asset management. The authors conclude that a comprehensive approach to asset management is needed when reevaluating the value of fixed assets. A comprehensive approach should be based on the development of revaluation and impairment techniques to analyze the effectiveness of the financial and economic system and balance sheet control and the financial performance report in strategic and tactical asset management

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Rennekamp, Kristina, Kathy K. Rupar, and Nicholas Seybert. "Impaired Judgment: The Effects of Asset Impairment Reversibility and Cognitive Dissonance on Future Investment." Accounting Review 90, no. 2 (August 1, 2014): 739–59. http://dx.doi.org/10.2308/accr-50879.

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ABSTRACT This paper examines how the reversibility of the accounting effect of asset impairments affects managers' investment decisions. We conduct two experiments in which participants act as CEO of a multi-division electronics company that suffers a large asset impairment at one of the divisions. Drawing on prior psychology research involving cognitive dissonance and decision reversibility, we predict and find that managers who are responsible for the decision to record the asset impairment invest more in the impaired division when the accounting effect of the impairment is reversible than when it is irreversible. This is consistent with the idea that reversible accounting effects encourage behavioral attempts to alter the cash flow outcome, while irreversible accounting effects encourage belief revision to rationalize the cash flow outcome. Also in line with cognitive dissonance theory, we show that managers who are not responsible for the decision to impair the asset, or managers who are given the opportunity to deny responsibility for the asset impairment, do not differ in their investment in the impaired division, regardless of impairment reversibility.

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Georges, Maxeem. "Changes to the growth and discount rates and asset impairment." Accounting Research Journal 33, no. 4/5 (July 1, 2020): 577–92. http://dx.doi.org/10.1108/arj-09-2019-0175.

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Purpose With timeliness and measurement of asset impairments as well as management opportunistic behaviour being topical, since the issuance of Australian Accounting Standards Board (AASB) 136, this study aims to examine whether assumptions about growth and discount rates made about asset recoverable amounts determine asset impairments. Design/methodology/approach This study uses a sample of 450 firm-year observations representing 133 Australian listed firms from 2015 to 2018. An estimation model is used where asset impairments is the dependent variable, growth and discount rates are the variables of interest and several impairment indicators are included as controls. Findings The results show that the decrease in growth rate but not the increase in discount rate affects the recognition of large asset impairments, where firms decrease the growth rate in the year of recognition. A change in discount rate affects asset impairments only when it is higher than the industry average. Hence, the growth rate is the management’s tool of choice in the recognition of asset impairments. Originality/value This study provides additional insight into how AASB 136 is used in practice. This includes investigating the tools used by firms in the calculation of asset recoverable amount and whether firms provide important information, as a part of disclosure. The results are of interest to investors and policymakers because they highlight the need for more restrictions around growth rate assumptions and less variation in disclosure.

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Morales, Emmanuel Garcia, and Nicholas Reed. "Early Retirement and Sensory Impairments: The Modifying Effect of Total Assets." Innovation in Aging 5, Supplement_1 (December 1, 2021): 441. http://dx.doi.org/10.1093/geroni/igab046.1712.

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Abstract Sensory impairments are common among older adults. Little is known on the association between sensory impairments, which impact labor productivity, and the effect modification of wealth. We used the 2006-2018 rounds of the Health and Retirement Study. Hearing (HI) and vision (VI) impairments (self-report) at baseline, and working status throughout the study period was observed. Logistic regression models, adjusted for demographic, socioeconomic, and health characteristics, were used to characterize the association of sensory impairment and early retirement (i.e., before age 65). Secondary analysis stratified by assets. Among 1,688 adults ages 53-64, 1,350 had no impairment, 140 had HI only, 141 VI only, and 57 had dual sensory impairment (DSI). Only adults with HI had higher odds of early retirement (Odds Ratio [OR]: 1.6; 95% Confidence Interval [CI]: 1.0,2.5) relative to those without sensory impairment. Among those with large assets, those with HI had higher odds (OR:2.6, 95% CI: 1.4,5.2) and those with VI had lower odds (OR. 0.37; 95% CI: 0.2,0.8) of early retirement. Among the low asset group, we found no differences across impairment groups for the odds of retirement. In sample of older adults, we provide evidence that the presence of hearing impairment is associated early retirement. Secondary analyses suggest wealth may modify this association which highlights the wealth disparities faced by people with sensory impairments.

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Kaipova, G. S., D. I. Zakirova, and N. Berdimurat. "Methodology for testing assets for impairment during the coronavirus pandemic." Bulletin of "Turan" University, no. 4 (December 28, 2021): 62–69. http://dx.doi.org/10.46914/1562-2959-2021-1-4-62-69.

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Accounting for the impairment of assets is one of the difficult issues in the preparation of financial statements. However, despite the considerable attention of domestic and foreign accounting science to tangible and intangible assets, the methodological apparatus for analyzing the procedure of asset impairment remains insufficiently developed. Issues that take into account the specifics of the development of the economic environment for the functioning of companies, the state and degree of the accounting and financial reporting system have not been worked out, which requires a comprehensive study of methodological issues of checking assets for impairment. Assessing whether an asset has decreased in value can be highly subjective and impairment can appear as a failure of directors, prompting management to underestimate the impairment loss. An impairment loss could have a material effect on a company's financial statements if the assets are overvalued. The main difficulties lie in recognizing when it is necessary to conduct impairment tests, applying the value in use and determining the cash-generating unit (CGU). In some cases, the application of the standard may be difficult, and therefore companies may inadvertently include distorted data in the reporting. The article discusses the application of the rules for determining indicators of impairment during the coronavirus pandemic. Particular attention is paid to the consideration of the principles and procedures of IFRS IAS 36, which apply to the impairment of assets in the form of a right of use. Based on the results of this study, several recommendations have been compiled for accountants who need to conduct an impairment test.

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Choi, Sumi. "Audit Characteristics and Asset Impairment Recognition." Journal of Taxation and Accounting 20, no. 6 (December 31, 2019): 115–35. http://dx.doi.org/10.35850/kjta.20.6.05.

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Park, Jongchan, and Sejoong Lee. "Quarterly Distribution of Asset Impairment Losses*." Korean Accounting Review 45, no. 1 (February 28, 2020): 147–71. http://dx.doi.org/10.24056/kar.2019.11.003.

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Linnenluecke, Martina K., Jac Birt, John Lyon, and Baljit K. Sidhu. "Planetary boundaries: implications for asset impairment." Accounting & Finance 55, no. 4 (October 26, 2015): 911–29. http://dx.doi.org/10.1111/acfi.12173.

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Munter, Paul. "Asset impairment proposal, share-based payments." Journal of Corporate Accounting & Finance 12, no. 2 (January 2001): 77–81. http://dx.doi.org/10.1002/1097-0053(200101/02)12:2<77::aid-jcaf12>3.0.co;2-z.

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Kulyk, Andrii. "Specifics of Asset Impairment in the Conditions of Armed Aggression." Oblik i finansi, no. 4(98) (2022): 5–12. http://dx.doi.org/10.33146/2307-9878-2022-4(98)-5-12.

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A decrease in the value of the assets of enterprises due to direct damage or destruction, as well as a decrease in expected benefits due to the deterioration of the external environment in which the business operates, are the consequences of the Russian Federation's armed aggression in Ukraine. Therefore, the issue of accounting approaches and procedures for assessing losses from asset impairment becomes relevant. The article aims to define and critically analyze the features of the procedures for the impairment of fixed assets in connection with armed aggression. Signs of impairment are identified, the analysis of which is a prerequisite for assessing losses from the impairment of fixed assets. Cases and problematic aspects of implementing asset impairment procedures in conditions of armed aggression have been identified. Among them are the instability of the external environment, the need to update business plans, the development of several cash flow forecast scenarios, and the need to take into account additional risks from armed aggression in the discount rate. Methods of fair value assessment proposed in international valuation standards were disclosed. When identifying assets subject to an impairment test, it is proposed to create a register of objects that have suffered from armed aggression. When choosing between the assessment of fair value and value-in-use, the author concluded that determining fair value is a more difficult task, as it is based to a greater extent on external market assumptions. In contrast, the calculation of value-in-use is a more feasible task for the company's management, provided that the business is updated on time – plans and forecasts.

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Lin, Tzong-Huei, Ching-Chieh Lin, Yueh Cheng, and Wen-Chih Lee. "Asset impairment and corporate governance: evidence from the finance industry." Corporate Ownership and Control 7, no. 2 (2009): 411–19. http://dx.doi.org/10.22495/cocv7i2c4p2.

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The purpose of this paper is to explore whether asset impairment loss as stipulated in International Accounting Standards (IAS) No. 36 provides an opportunity for finance industry to engage in earnings management, and whether corporate governance mechanism can deter such behavior. Using a sample of Taiwan finance industry, our results show that the amounts of asset impairment losses are related to “income smoothing” incentive rather than “big bath” motive. We also find that directors/managers recognize asset impairment losses basing on self-interest consideration and corporate governance mechanism have significant effect on asset impairment decision. The result also shows that financial holding company recognizes less asset impairment losses than non-financial-holding financial institution. Our conclusions are robust to different model specification, and are free from multicollinearity and outliers effects. This study contributes to understand the asset impairment behavior of finance industry and the behavior differences between financial holding company and non-financial-holding financial institution.

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Kuter, Mikhail, Marina Gurskaya, Angelina Andreenkova, and Ripsime Bagdasaryan. "Asset Impairment and Depreciation before the 15th Century." Accounting Historians Journal 45, no. 1 (June 1, 2018): 29–44. http://dx.doi.org/10.2308/aahj-10575.

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ABSTRACT This paper investigates impairment and depreciation accounting in the 13th to 15th century. It finds that the first known instance of impairment accounting was in 1321, while for depreciation, it was 1399 not, as has previously been claimed, 1299. The study demonstrates the difference in approach at that time between the two forms of adjustment and shows that impairment was the original form of adjustment for reduction in asset values, a form that was applied in situations where physical assets had been lost, or deteriorated, or devalued over the reporting period. In contrast, depreciation was algorithmic, linked to a time-based straight-line depreciation charge equivalent to 10 percent per annum. These findings not only relocate recognition of the emergence of depreciation provisions to the end of the 14th century but, also, from France to Spain. However, in both cases, in Italian firms with Italian accountants.

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Stein, Sarah E. "Auditor Industry Specialization and Accounting Estimates: Evidence from Asset Impairments." AUDITING: A Journal of Practice & Theory 38, no. 2 (August 1, 2018): 207–34. http://dx.doi.org/10.2308/ajpt-52231.

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SUMMARY This study examines whether auditor competencies developed through industry specialization play a role in monitoring client firms' accounting estimates. Specifically, I focus on asset impairment decisions as a key accounting estimate given managers incentives to hide these losses and the PCAOB's criticisms of auditors' testing in this area. Impairments examined in this study relate to goodwill and intangibles, other long-lived assets, and investment securities. Using the portfolio share approach to measure office level specialization, I find that client firms engaging industry specialist auditors exhibit a greater propensity to record, and record larger, impairments relative to client firms engaging auditors with less specialization. The results also demonstrate that impairments recognized by clients of specialist auditors are more positively associated with concurrent bad news signals, suggesting that these losses are recognized on a more timely basis. This evidence enhances our understanding of the factors affecting auditors' ability to evaluate complex accounting estimates. Data Availability: Data are available from the public sources cited in the text.

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Syed Ali, Sharifah Sabrina, Sharon Cheuk Choy Sheung, and Mohd Waliuddin Mohd Razali. "Case Study in a Malaysian Public Agency on an Asset Management-Moving Towards the Accrual Basis of Accounting." Accounting and Finance Research 8, no. 3 (July 26, 2019): 149. http://dx.doi.org/10.5430/afr.v8n3p149.

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As part of the strategic reform of Malaysian public services under the Government Transformation Program (GTP), accrual accounting is expected to be fully adopted in public sector financial reporting commencing on 1 January 2015, in order to ensure alignment with the global accounting standards. Consequently, in order to access the government effectiveness of moving towards the accrual basis of accounting, this study is to examine the asset management system in a Malaysian public agency; to evaluate the extent of compliance with MPSAS 17, Property, Plant and Equipment (PPE), IPSAS 26, Impairment of Cash-Generating Assets and IPSAS 21, Impairment of Non-Cash Generating Assets. Using qualitative approach, a preliminary study was conducted via interviews and through obtaining documents. The findings include the following: MPSAS17 has not been strictly adhered to and software is used to monitor the assets; however, the disposal of assets is a manual process and is not automated. The study also discussed any weaknesses pertaining to the said asset accounting system, and suggested recommendations for improvement thereon.

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Banker, Rajiv D., Sudipta Basu, and Dmitri Byzalov. "Implications of Impairment Decisions and Assets' Cash-Flow Horizons for Conservatism Research." Accounting Review 92, no. 2 (July 1, 2016): 41–67. http://dx.doi.org/10.2308/accr-51524.

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ABSTRACT Accountants examine multiple indicators when assessing whether individual assets are impaired. Different indicators predict cash flows over varying time horizons, and their importance varies with how far into the future individual assets are expected to generate cash flows. We predict that earnings exhibits asymmetric timeliness with respect to multiple indicators, including stock return, sales change, and operating cash flow change, which differentially explain write-downs of current assets, long-lived tangible assets, and indefinite-lived goodwill. We predict an interaction effect between indicators, such that the total impact of several consistent indicators is greater than the sum of their individual impacts. Empirical estimates for U.S. firms are consistent with our predictions and yield new insights about the effects of multiple indicators for both conservatism and impairment research. Our multi-indicator asymmetric models also change inferences about the relative explanatory power of economic factors versus reporting incentives in asset impairments. JEL Classifications: G32; L25; M41; M42.

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Gordon, Elizabeth A., and Hsiao-Tang Hsu. "Tangible Long-Lived Asset Impairments and Future Operating Cash Flows under U.S. GAAP and IFRS." Accounting Review 93, no. 1 (June 1, 2017): 187–211. http://dx.doi.org/10.2308/accr-51815.

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ABSTRACT This paper investigates the predictive value of tangible long-lived asset impairments for changes in future operating cash flows under U.S. GAAP and IFRS. We find that impairments reported under IFRS are negatively associated with changes in future operating cash flows, whereas those under U.S. GAAP, on average, are not. We investigate whether differences in the predictive value are attributable to differences in recognition or measurement, providing evidence suggesting that impairment recognition under U.S. GAAP is delayed. Evidence also suggests that the value-in-use measurement attribute, allowed under IFRS, does not induce under-impairing as IFRS and U.S. GAAP impairments are similarly related to future impairments. The main result of a negative association under IFRS, but not U.S. GAAP, holds after considering future impairments to control for measurement differences, macro-economic factors, and firm reporting incentives. Further, impairment losses under IFRS are more predictive in high-enforcement countries. JEL Classifications: D78; F02; M16; M41; G38. Data Availability: Data used are available from sources identified in the paper.

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Vernando, Andreas. "ACCOUNTING STANDARDS FOR FIXED ASSETS OF U.S. GAAP AND IFRS: COVID-19 PANDEMIC AND EARNINGS MANAGEMENT PERSPECTIVES." Berkala Akuntansi dan Keuangan Indonesia 6, no. 1SP (July 31, 2021): 122. http://dx.doi.org/10.20473/baki.v6i1sp.27735.

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FASB and IASB have differences in setting the accounting standard for fixed asset. The FASB does not allow firms to restore the asset value that has been written down, while the IASB allow companies to recover the asset values that has been written down. These differences have distinct implication to depict the COVID-19 pandemic phenomenon and prevent earnings management that will affect the qualitative characteristics of the faithful representation. Therefore, this study aims to analyze the fixed asset accounting standards of U.S. GAAP or IFRS which is more optimal to improve the faithful representation in the case of the COVID-19 pandemic and earnings management. Based on an analysis of the theory and literature review, this study conclude that the fixed assets accounting standard of IFRS is more optimal to represent the COVID-19 pandemic faithfully than that of U.S. GAAP. This is because IFRS allows for recovery of impairment losses. In addition, the fixed asset accounting standard of U.S. GAAP is more optimal than that of IFRS for preventing earnings management so as to improve the quality of faithful representation of the fixed asset value. This is because the fair value measurement for fixed assets involves estimation and subjectivity of the asset appraiser enhancing the possibility of earnings management.

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Сериков, Павел Юрьевич, Константин Анатольевич Сиволоцкий, and Анна Станиславовна Рева. "Impairment of non-current assets: methodology and features of the assessment." SCIENCE & TECHNOLOGIES OIL AND OIL PRODUCTS PIPELINE TRANSPORTATION, no. 4 (August 31, 2022): 394–408. http://dx.doi.org/10.28999/2541-9595-2022-12-4-394-408.

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В условиях внешней нестабильности обесценение активов может оказывать значительное влияние на финансовый результат компаний. Своевременная и корректная оценка изменения стоимости активов вследствие воздействия внешних и внутренних факторов риска имеет важное значение для формирования достоверной и прозрачной финансовой информации. Для повышения качества информации о финансовом положении компаний российские стандарты бухгалтерского учета постепенно сближаются с международными стандартами финансовой отчетности (МСФО), в том числе в части отображения реального изменения стоимости активов. В статье рассмотрены требования российских и международных стандартов к проведению проверки внеоборотных активов на предмет обесценения. Подробно раскрыта методика проверки активов на наличие обесценения в соответствии с МСФО, представлен алгоритм и описаны основные этапы проведения теста на обесценение - от определения балансовой стоимости актива до формирования прогнозных денежных потоков и расчета ставки дисконтирования. На примере условных участков по транспортировке нефтепродуктов показаны практические аспекты проведения теста на обесценение активов. In conditions of external instability, the impairment of assets can have a significant impact on the financial results of companies. Timely and proper assessment of changes in the value of assets due to the impact of external and internal risk factors is important for the formation of reliable and transparent financial information. To improve the quality of information on the financial position of companies, Russian accounting standards are gradually moving closer to international financial reporting standards (IFRS), including in terms of reflecting the real change in the value of assets. The article considers the requirements of Russian and international standards for checking non-current assets for impairment. The methodology for checking assets for impairment in accordance with IFRS is disclosed in detail, an algorithm is presented and the main stages of an impairment test are described - from determining the book value of an asset to generating forecast cash flows and calculating the discount rate. On the example of conditional sections for the transportation of oil products, the practical aspects of conducting an asset impairment test are shown.

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Widyatini, Ignatia Ryana, and Raymundo Patria Hayu Sasmita. "The Effect of Productive Asset Diversification on Discretionary Behavior on Allowance for Loan Losses." International Journal of Innovation, Management and Technology 13, no. 2 (2022): 37–41. http://dx.doi.org/10.18178/ijimt.2022.13.2.918.

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The first objective of this study is to determine whether the discretionary behavior is built by diversification or concentrated productive asset financing. Discretionary behavior reflects the value of additional losses to form Allowance for Loan Losses or ALL based on several management motivations. The formation of ALL aims to maintain the quality of productive assets and the health of banks. Discretionary behavior is estimated from the difference between the total ALL and the non-discretionary component presented through a portfolio of economic impairment. Specifically, the concentration of banking asset financing in this study is classified based on the type of loan. This study examines the effect of the concentration of asset financing on loan distribution toward discretionary behavior. This research was conducted in several commercial banks in Indonesia.

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Kustono, Alwan Sri, Aisa Tri Agustini, and Scherrgyo Agung Rhyo Dermawan. "Beware of the existence of a big bath with asset impairment after pandemic covid-19!" Indonesian Accounting Review 11, no. 1 (January 14, 2021): 21. http://dx.doi.org/10.14414/tiar.v11i1.2243.

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This study attempts to investigate the relationship between big bath accounting and asset impairment. It used the sample consisting of 231 firm-year observations from 33 mining companies listed on the Indonesia Stock Exchange during the 2012 to 2018 period. Logistic regression has been used to analyze a big bath accounting on assets impairment. The results provide evidence that companies that tend to do a big bath accounting will recognize a loss of asset value. A big bath accounting is done because managers assume that investors will respond when the company suffered large losses or small losses. The manager acknowledges the costs of future periods and current period losses when unfortunate unavoidable circumstances in the current period. It will consequently make a profit higher than expected in the next year. In the next period, the company’s performance will look better so that managers can maximize utility in the form of compensation for the targets that have been achieved.

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Martinson, Otto B. "Shopping for Bargain-Priced Companies? Avoid Asset Impairment Traps." Journal of Corporate Accounting & Finance 13, no. 3 (March 2002): 63–70. http://dx.doi.org/10.1002/jcaf.10055.

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김은주, Park, Mi Young, and Choi,Sang-Moon. "A Study on the Value Relevance of Asset Impairment losses." Korea International Accounting Review ll, no. 31 (June 2010): 87–109. http://dx.doi.org/10.21073/kiar.2010..31.005.

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Conrod, Joan Davison, and Judy Cumby. "On-Line Gaming, Financial Reporting, and Audit: Chester Games Corp." Issues in Accounting Education 31, no. 4 (July 1, 2015): 431–37. http://dx.doi.org/10.2308/iace-51221.

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ABSTRACT This case examines selected financial reporting and audit issues in the context of the on-line gaming industry. Key issues are revenue recognition and asset impairment under IFRS. Revenue trends are critical for the company as it considers a public offering. The estimates inherent in recognizing revenue for virtual goods, both consumable goods and durable goods, make revenue recognition and audit of revenue especially judgmental. IAS 18 or IFRS 15 may be used as a framework to discuss revenue recognition. Judgment is also required to support impairment testing of an intangible asset and goodwill.

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EBRAHIM, MUHAMMED-SHAHID. "PRICING ASSET BACKED ISLAMIC FINANCIAL INSTRUMENTS." International Journal of Theoretical and Applied Finance 03, no. 01 (January 2000): 59–83. http://dx.doi.org/10.1142/s0219024900000048.

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The social impact of bankruptcies and loan defaults result in structural impairment of the economy. This paper presents a judicious methodology for pricing durable asset backed financing facilities while reducing their risk of default. Although the framework of the study is that of an Islamic banking system, it can also be implemented by conventional intermediaries. Both credit as well as hybrid (quasi-equity) facilities in the form of Bai' Bithman Ajil (BBA)/Ijara wal-'Iqtina and Decreasing Mudharabah (DM) instruments are discussed using computer simulation. These are applied to the cases of automobile financing and home mortgages. Placing additional assets as Rehn (security) has the capacity to improve the financing ratio and/or the term to maturity of both kinds of vehicles.

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Gonin, V., E. Panchenko, E. Kibireva, and O. Nomokonova. "APPROACHES TO THE VALUATION AND REVALUATION OF FIXED ASSETS ACCORDING TO RUSSIAN AND INTERNATIONAL STANDARDS." Transbaikal state university journal 27, no. 3 (2021): 87–98. http://dx.doi.org/10.21209/2227-9245-2021-27-3-87-98.

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Questions of valuation and revaluation of fixed assets in a market environment inevitably arise. This is due to the increased role of assessing the effectiveness of asset management. The harmonization of national and international accounting standards allows us to consider the assessment and revaluation processes, both from the point of view of the accounting system and from the point of view of the financial consequences of the procedures performed. The purpose of the study is to study the historical background and systematize approaches to the assessment and revaluation of fixed assets according to Russian and international standards. To achieve this goal, the following tasks are set: to study the methods and historical aspect of revaluation; to study the conceptual framework of revaluation and impairment; to systematize the general provisions of the methodology for assessing the value of fixed assets during revaluation and impairment. The object of the study is fixed assets. In the course of the study, the history of revaluation of the cost of fixed assets is considered, the conceptual apparatus of the cost of fixed assets is analyzed in relation to the procedures for revaluation and impairment testing, the methodology of revaluation and impairment is considered. The paper concludes that it is necessary to introduce into the practice of accounting and management procedures for assessing the value of fixed assets and revaluing them, which will allow us to obtain reliable information when analyzing the impact of cost changes on the indicators used in determining the effectiveness of activities

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Kołodziej, Sabina, and Ewa Maruszewska. "Impairment of assets – the role of norm reminders in non-compliant accounting decisions. An experimental investigation of gender differences." Zeszyty Teoretyczne Rachunkowości 45, no. 2 (July 2, 2021): 103–20. http://dx.doi.org/10.5604/01.3001.0014.9565.

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Objective: This article examines the impact of accounting norm reminders on a decision about the impairment of two groups of assets: receivables and inventories. It also inves-tigates the ethical judgment of a non-compliant decision. Method: The examination is performed via a laboratory experiment. Results: A non-compliant decision was found to have a significant impact in the groups of males and females. Men’s propensity to non-compliance was higher regardless of the group of assets, suggesting that imprecise accounting regulations are perceived as a gateway to manipulations. Women’s propensity to make a non-compliant decision after recalling a norm was different, depending on the type of asset. The ethical evaluation was affected by gender: women evaluated a non-compliant decision of two groups of assets differently after recalling a norm. The main contribution of the study indicates that accountants may decide the opposite to the norm’s intention when the norm is less precise. Limitations: The study was conducted in one country and among masters’ degree ac-counting students. The number of males was relatively small. Practical implications: The results should be of interest to behavioral researchers, academic teachers, and Polish standards setters as they continue to develop national accounting standards. Contribution: We provide evidence that the interaction of norm recall, the type of asset, as well as the gender of the decision-maker impacts non-compliant decisions.

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Riedl, Edward J. "An Examination of Long-Lived Asset Impairments." Accounting Review 79, no. 3 (July 1, 2004): 823–52. http://dx.doi.org/10.2308/accr.2004.79.3.823.

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Prior research reveals that write-offs of long-lived assets are both large in magnitude and frequent in occurrence. Responding to calls for enhanced reporting of these items, the FASB issued SFAS No. 121, Accounting for the Impairment of Long-Lived Assets. However, its effect on the characteristics of reported write-offs remains unclear, as implementation requires inherently subjective estimates. Further, critics (including dissenting FASB board members and the SEC) question the standard's guidance. Motivated in part by this debate, this paper contrasts the characteristics of write-offs reported prior versus subsequent to the issuance of SFAS No. 121. Empirical results reveal that economic factors have a weaker association with write-offs reported after SFAS No. 121. This is consistent across macro, industry, and firm-specific variables. Results also indicate a higher association between write-offs and “big bath” reporting behavior after the standard's implementation, and that this “big bath” behavior more likely reflects opportunistic reporting by managers rather than the provision of their private information. These inferences are robust to a number of alternative specifications and variable definitions. Overall, the results suggest the reporting of write-offs under SFAS No. 121 has decreased in quality, consistent with criticisms of the standard.

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Mookdee, Tharatee, and Sheila Bellamy. "Asset Classification, Subsequent Measurement and Impairment Testing for Carbon Emission Trading." European Financial and Accounting Journal 12, no. 3 (December 11, 2018): 65–86. http://dx.doi.org/10.18267/j.efaj.188.

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Velte, Patrick. "Development and current criticism of asset impairment in German tax accounting." Corporate Ownership and Control 13, no. 1 (2015): 756–68. http://dx.doi.org/10.22495/cocv13i1c7p3.

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In German tax accounting, the going concern value (“Teilwert”) is the central measurement of asset impairment since 1934. The conceptual weaknesses of the concept have set the future of the 80-year old fiscal measurement tradition up for discussion. First, I shed light on the development of the accounting measurement concepts from Prussian Civil Code 1794 (ALR) to the German Income Tax Act 1934. Then, I analyse the main results of the current tax jurisdiction and draw a comparison to the German commercial law and the IFRS. I state that the creation of a common basis for measurement under commercial and tax law would be desirable, since the going concern value was understood as neither an exception, nor as being subject to the whims of targeted tax accounting policies. The provision of a purely indicator-based impairment test by the IASB is also recommended.

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Park, Bum－Jin. "The Relationship between Asset Impairment Accounting and Management Operating Profit Forecast." Review of Accounting and Policy Studies 24, no. 3 (August 31, 2019): 163–89. http://dx.doi.org/10.21737/raps.2019.08.24.3.163.

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Chen, Shimin, Yuetang Wang, and Ziye Zhao. "Regulatory Incentives for Earnings Management through Asset Impairment Reversals in China." Journal of Accounting, Auditing & Finance 24, no. 4 (October 2009): 589–620. http://dx.doi.org/10.1177/0148558x0902400405.

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Munter, Paul. "Asset impairment and market value accounting: The profession begins to move." Journal of Corporate Accounting & Finance 4, no. 2 (1992): 137–41. http://dx.doi.org/10.1002/jcaf.3970040204.

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Yang, Jingjing. "Analysis of Goodwill Impairment Risk of Asset-light enterprises under High Premium Merger and Acquisition." Frontiers in Business, Economics and Management 7, no. 2 (February 5, 2023): 6–9. http://dx.doi.org/10.54097/fbem.v7i2.4349.

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From the perspective of goodwill generated by mergers and acquisitions, this paper analyzes the reasons for the huge goodwill generated by high-premium mergers and acquisitions of asset-light enterprises and the influencing factors of goodwill impairment, finds out the adverse consequences of goodwill impairment, and puts forward some measures to prevent the risk of goodwill impairment caused by high-premium mergers and acquisitions, so as to make enterprises more objective and rational in future mergers and acquisitions and minimize the negative impact of high-premium mergers and acquisitions.

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Dudycz, Tadeusz, and Jadwiga Praźników. "Does the Mark-to-Model Fair Value Measure Make Assets Impairment Noisy?: A Literature Review." Sustainability 12, no. 4 (February 18, 2020): 1504. http://dx.doi.org/10.3390/su12041504.

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With the purpose of reporting high-quality, transparent, and comparable information in financial statements, there is a strong, visible trend towards the implementation and use of International Financial Reporting Standards (IFRS), which represent the Anglo-American accounting model. According to IFRS, the fair value has become a dominant measurement paradigm. The purpose of this paper is to examine the implications of the implementation of the mark-to-model fair value measures for asset impairment tests on the relevance and reliability of information presented in financial reports. Among the three levels of the fair value hierarchy, mark-to-model is most controversial because it is susceptible to manipulation and has poor verifiability. After a systematic literature review and a synthesis of high-quality contributions in this field, we conclude that the implementation of asset impairment tests, that use the mark-to-model fair value measures, is not promising for increasing the quality and reliability of the information presented in financial statements. Unfortunately, research has shown that companies are using that tool to manage their earnings and promote managers’ unethical behaviour. Furthermore, capital markets’ reaction to asset impairment announcements is negative. Performed analysis can provide valuable pointers for standard setters, accounting policy makers, and researchers.

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Dickinson, Victoria, Paul Kimmel, and Terry Warfield. "Bioscience Company: Accounting for Idle Plant Assets." Issues in Accounting Education 26, no. 1 (February 1, 2011): 155–62. http://dx.doi.org/10.2308/iace.2011.26.1.155.

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ABSTRACT: Bioscience Company and its auditors have been in discussions with the SEC concerning the accounting for its long-lived assets. Among the issues being discussed is the company’s discontinuation of depreciation on productive assets that it had used previously, but it was not currently using. The case permits a technical examination of depreciation and impairment accounting issues with consideration of the FASB’s asset/liability measurement approach, fair value accounting, use of the FASB Codification, and comparisons to International Financial Reporting Standards. The case requirements are divided into basic requirements, which would be appropriate for intermediate level students; and advanced requirements, which would be more appropriate for accounting seniors, as well as M.B.A. and fifth-year accounting students.

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Detzen, Dominic, Tobias Stork genannt Wersborg, and Henning Zülch. "Bleak Weather for Sun-Shine AG: A Case Study of Impairment of Assets." Issues in Accounting Education 30, no. 2 (December 1, 2014): 113–26. http://dx.doi.org/10.2308/iace-51007.

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ABSTRACT This case originates from a real-life business situation and illustrates the application of impairment tests in accordance with IFRS and U.S. GAAP. In the first part of the case study, students examine conceptual questions of impairment tests under IFRS and U.S. GAAP with respect to applicable accounting standards, definitions, value concepts, and frequency of application. In addition, the case encourages students to discuss the impairment regime from an economic point of view. The second part of the instructional resource continues to provide instructors with the flexibility of applying U.S. GAAP and/or IFRS when students are asked to test a long-lived asset for impairment and, if necessary, allocate any potential impairment. This latter part demonstrates that impairment tests require professional judgment that students are to exercise in the case.

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김정은, Sungshick Shin, and JeonSungil. "The Effect of Asset Impairment Recognition on Firm Characteristics and Discretionary Accruals." Korea International Accounting Review ll, no. 46 (December 2012): 321–42. http://dx.doi.org/10.21073/kiar.2012..46.015.

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Laskaridou, Ekaterini C., and Athanasios Vazakidis. "Detecting Asset Impairment Management: Some Evidence from Food and Beverage Listed Companies." Procedia Technology 8 (2013): 493–97. http://dx.doi.org/10.1016/j.protcy.2013.11.065.

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Sari, Sarlina. "Pengaruh Revaluasi Asset Non Keuangan, Goodwill dan Goodwill-impairment Terhadap Biaya Audit dengan Kepemilikan Keluarga sebagai Variabel Moderasi." Moneter - Jurnal Akuntansi dan Keuangan 7, no. 1 (March 31, 2020): 15–23. http://dx.doi.org/10.31294/moneter.v7i1.6838.

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The purposes of this study are to examine the effect of non-financial assets revaluation, goodwill and goodwill-impairment on audit fees family ownership as moderating variables. This research uses sample of Indonesia Stock Exchange non-financial companies from the years 2011-2015. Regression results show that revaluation of non-financial assets, goodwill and goodwill-impairment have no effect on audit fees. However, companies that family-owned, the audit fee is higher if the companies revalue its nonfinancial assets. The results of this study can be considered by regulators to set auditing standards related to audit of fair value that require complex accounting estimates, so that auditors are more aware abaout the reliability of fair values that are difficult to observe.Keywords: Non-financial assets revaluation; goodwill, goodwill-impairment; audit fees; family ownership

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Chai, Mengdie. "The Impacts of New Financial Instrument Accounting Standards on Chinese Commercial Banks." BCP Business & Management 14 (November 24, 2021): 9–14. http://dx.doi.org/10.54691/bcpbm.v14i.71.

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On March 31, 2017, the Ministry of Finance revised and issued three new financial instrument accounting standards including Accounting Standards for Enterprises No.22- Recognition and Measurement of Financial Instruments. The banks of China’s A and H stocks have implemented the new standards since January 1, 2018. From January 1, 2021, the scope of implementation of the standards covers all non-listed commercial banks. The new financial instrument standards have undergone great changes in the classification and impairment treatment of financial assets, which is bound to have a profound impact on Chinese commercial banks. This article analyzes the impacts of new standards on Chinese commercial banks from the aspects of financial asset classification and measurement, impairment, credit risk management, profit and earnings management. Finally, the paper puts forward several suggestions and measures on the system and model construction, credit policy and post-loan risk management and talent training, in order to facilitate banks smooth the transition to the new standards.

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Li, Yin Xiang. "The Construction Process and Effectiveness of the Asset Impairment Standard System in China." Advanced Materials Research 452-453 (January 2012): 374–78. http://dx.doi.org/10.4028/scientific5/amr.452-453.374.

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Riedl, Edward J. "Discussion of “Regulatory Incentives for Earnings Management through Asset Impairment Reversals in China”." Journal of Accounting, Auditing & Finance 24, no. 4 (October 2009): 621–26. http://dx.doi.org/10.1177/0148558x0902400406.

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Magli, Francesca, Alberto Nobolo, and Matteo Ogliari. "Comprehensibility and transparency of the impairment tests in contexts of crisis." Risk Governance and Control: Financial Markets and Institutions 6, no. 4 (2016): 141–50. http://dx.doi.org/10.22495/rcgv6i4c1art4.

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The application of Impairment Test on Goodwill is one of the most debated issues in the international arena, both in relation to the multiple profiles of subjectivity inherent in the valuation criteria set out in IAS 36 and in relation to the novelty that brings this procedure. For this reason, in our work we analyze Goodwill, Impairment Test and the international regulations governing them that are IAS 36 and IFRS 3. The Goodwill is an important asset for some companies, an intangible asset that arises as a result of the acquisition of one company by another for a premium value. Its assessment is, however, discretionary. Main objective of this paper is to analyze this discretionary and check whether the information resulting from the Impairment Test on Goodwill is in accordance with the provisions of IAS 36. The empirical analysis has been developed on a selected sample relative to utilities in Europe who had recorded higher Goodwill in 2012. The results show that disclosures do not always conform to the requirements of IAS 36; in particular, there is a reluctance of the company managements in providing quantitative information about the sensitivity analysis of the Impairment Test results. The practical implications lead to stress that the reader of the financial statements is not facilitated, not only he fails to assess the effects on the recoverability of the value but also to recognize the reliability of the estimates.

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Petersen, Christian V. "The value relevance of goodwill and goodwill amortization in a Danish setting." Corporate Ownership and Control 4, no. 1 (2006): 227–41. http://dx.doi.org/10.22495/cocv4i1c1p5.

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Based on data from the Danish Stock Exchange, this paper examines the value relevance of purchased goodwill and explores how goodwill should be measured subsequent to initial recognition. Danish accounting legislation requires capitalization and amortization of purchased goodwill. As of 2005 Danish listed companies must comply with international financial reporting standards (IFRS) issued by the International Accounting Standards Boards (IASB). An exposure draft (ED 3: Business Combinations) is presently under consideration by the IASB. If this exposure draft is implemented, Danish listed companies must carry out impairment tests on goodwill. The value relevance is tested by examining the association between goodwill and goodwill amortization and share prices, incremental to other accounting variables.The overall findings suggest that investors perceive goodwill as an asset with a long economic life time. The results support the Danish Financial Statements Act that requires capitalization of all purchased goodwill. The findings brings into question if goodwill amortization provides useful information to investors. This suggests that impairment testing might be an alternative way to measure acquired goodwill assets in subsequent years

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Limbong, Safitriani, Nana Diana, and Nana Diana. "Pengaruh Cadangan Kerugian Penurunan Nilai dan Net Interest Margin terhadap Profitabilitas pada Unit Usaha Syariah." Al-Kharaj : Jurnal Ekonomi, Keuangan & Bisnis Syariah 5, no. 1 (March 21, 2022): 235–44. http://dx.doi.org/10.47467/alkharaj.v5i1.1186.

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The purpose of this research is to analyze the effect on Profitability described by Return on Assets that can be influenced by Allowance for Impairment Losses (CKPN) and (NIM). The research method uses descriptive and verification methods. In this study, the Allowance for Impairment Loss (CKPN) variable is used as the X1 variable, the Net Intrest Margin (NIM) as the X2 variable and the Return On Asset (ROA) variable as the Y variable. The population in this study is Sharia Business Units registered with OJK with a quantity of 20 Sharia Business Units. Purposive sampling technique was used as a determinant of sampling so that the sample studied was 6 sharia business units, the data used came from the annual financial ratio reports for each sharia business unit contained in the Financial Services Authority (OJK). obtained in 2016 – 2021. The results of the partial study of CKPN cannot affect ROA but the NIM variable shows it can affect ROA, and simultaneously both cannot affect ROA of Sharia Business Units registered with OJK 2016-2021. Keywords: CKPN, NIM, ROA

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Deng, Qiandan. "Research on the Signal Effect of Performance Compensation Commitment on the Impairment of Goodwill in China." Engineering Economics 30, no. 5 (December 14, 2019): 567–78. http://dx.doi.org/10.5755/j01.ee.30.5.22892.

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This study using empirical research method and taking 1233 samples of A-share listed companies in China that completed major asset restructuring from 2007 to 2017, examines the signal effect of performance compensation commitment on goodwill impairment, and the impact of agency motivations on the signal effect based on the proportion of the performance compensation commitment that M&A targets achieve. I find evidence suggesting that the higher the proportion of the unfulfilled performance compensation commitment is, the higher the probability of goodwill impairment and the greater the amount of goodwill impairment. In addition, agency motivations affect the signal effect of performance compensation commitment on the impairment of goodwill. Specifically, for companies facing market return pressure and debt contracting pressure, the signal effect of the performance compensation commitment on the impairment of goodwill will be weakened. Furthermore, companies with performance loss have the incentive to use goodwill impairment to carry out a “big bath” and the loss motivation will lead to the overexpression of the signal effect of performance compensation commitment on goodwill impairment. The findings of this paper provide a new perspective for external users of financial statements to observe goodwill impairment and help them better understand managers’ opportunistic motivations to accrue goodwill impairment.

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Kim, Hye-Ri, and Jeong-Kyo Kim. "The Effect of Stakeholder Perspective Corporate Governance on the Discretion of Asset Impairment Recognition." Korean Academic Association of Business Administration 31, no. 2 (February 28, 2018): 377–403. http://dx.doi.org/10.18032/kaaba.2018.31.2.377.

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Laskaridou. "DETECTING ASSET IMPAIRMENT EARNINGS MANAGEMENT ON IFRS CONTEXT: SOME EVIDENCE FROM GREEK LISTED COMPANIES." American Journal of Applied Sciences 11, no. 6 (June 1, 2014): 963–68. http://dx.doi.org/10.3844/ajassp.2014.963.968.

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Journal articles on the topic 'Impairment of asset'

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