Reactions to regulation of accounting for goodwill
Article Abstract:
Regulations designed to achieve "uniformity in practice" in Australian firms' reporting of goodwill were first adopted in 1985 with the introduction of AAS18. Because of the requirement to amortise purchased goodwill, a number of firms either did not comply or took evasive actions to mitigate the effects of the standard. This paper documents and explains the pre-regulation cross-sectional variation in accounting practices. Reactions to the set of regulations introduced between 1985 and 1989 are then described and explained through a longitudinal study of accounting policy choice. We develop hypotheses which explain why the goodwill accounting rules reversed relations between the accounting methods adopted by firms and both the earnings effect of compliance and the market value of the firm's goodwill. The results are confirmatory. (Reprinted by permission of the publisher.)
Publication Name: Accounting and Finance
Subject: Business
ISSN: 0810-5391
Year: 1992
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Accounting information in the market for debt
Article Abstract:
This paper surveys trust deeds supporting listed public debt issues by Australian industrial and commercial companies. It provides evidence on the restrictive covenants and the accounting rules negotiated therein. The survey indicates cross-sectional variation in the covenants-rules which is related to the nature of the debt. The paper also compares the negotiated rules with mandated accounting standards. As in the U.S. the effect of the negotiated accounting rules is, generally, to reduce management's ability to relax constrictive covenants. (Reprinted by permission of the publisher.)
Publication Name: Accounting and Finance
Subject: Business
ISSN: 0810-5391
Year: 1986
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Accounting information and joint arrangements
Article Abstract:
The accounting profession has recently issued a standard (AAS19) on production sharing agreements and has signalled impending regulation of accounting for other types of joint arrangements. Here we discuss the nature of joint arrangements and the role that accounting information plays in causing such arrangements to exist, determining their legal form, safeguarding the interests of the contracting parties, and protecting other interested parties likely to be disaffected by the arrangement. (Reprinted by permission of the publisher.)
Publication Name: Accounting and Finance
Subject: Business
ISSN: 0810-5391
Year: 1986
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