Discount rates in disarray : evidence on flawed goodwill impairment testing

Carlin and Finch, this issue, compare goodwill impairment discount rates used by a sample of large Australian firms with ‘independently’ generated discount rates. Their objective is to empirically determine whether managers opportunistically select goodwill discount rates subsequent to the 2005 introduction of International Financial Reporting Standards (IFRS) in Australia. This is a worthwhile objective given that IFRS introduced an impairment regime, and within this regime, discount rate selection plays a key role in goodwill valuation decisions. It is also timely to consider the goodwill valuation issue. Following the recent downturn in the economy, there is a high probability that many firms will be forced to write down impaired goodwill arising from boom period acquisitions. Hence, evidence of bias in rate selection is likely to be of major concern to investors, policymakers and corporate regulators. Carlin and Finch claim their findings provide evidence of such bias. In this commentary I review the validity of their claims.

Evaluation of a Drunk Driving Warning System

The Drunk Driving Warning System is an alcohol interlock based on performance of the Critical Tracking Task (CTT). An evaluation was undertaken to determine CTT sensitivity to blood alcohol concentration (BAC), particularly at .05 g/100 ml. Subjects were 36 males in 3 age groups (18, 21 to 25, 35 years and above) divided into 2 alcohol consumption categories ("light" and "heavy"), and scored on 4 training and 2 test days (one alcohol and one placebo). The CTT performance declined as BAC increased and was significantly impaired at .05 BAC. However, performance was too variable for in-vehicle use. Age and alcohol consumption pattern were without effect.

Impact of simulated visual impairment on the cognitive test performance of young adults

Aims: This study investigated the effect of simulated visual impairment on the speed and accuracy of performance on a series of commonly used cognitive tests. ----- Methods: Cognitive performance was assessed for 30 young, visually normal subjects (M=22.0yrs ± 3.1 yrs) using the Digit Symbol Substitution Test (DSST), Trail Making Test (TMT) A and B and the Stroop Colour Word Test under three visual conditions: normal vision and two levels of visually degrading filters (VistechTM) administered in a random order. Distance visual acuity and contrast sensitivity were also assessed for each filter condition. ----- Results: The visual filters, which degraded contrast sensitivity to a greater extent than visual acuity, significantly increased the time to complete (p<0.05), but not the number of errors made, on the DSST and the TMT A and B and affected only some components of the Stroop test.----- Conclusions: Reduced contrast sensitivity had a marked effect on the speed but not the accuracy of performance on commonly used cognitive tests, even in young individuals; the implications of these findings are discussed.

Literacy, numeracy and learning in school-aged children identified as having speech and language impairment in early childhood

The progress of a nationally representative sample of 3632 children was followed from early childhood through to primary school, using data from the Longitudinal Study of Australian Children (LSAC). The aim was to examine the predictive effects of different aspects of communicative ability, and of early vs. sustained identification of speech and language impairment, on children's achievement and adjustment at school. Four indicators identified speech and language impairment: parent-rated expressive language concern; parent-rated receptive language concern; use of speech-language pathology services; below average scores on the adapted Peabody Picture Vocabulary Test-III. School outcomes were assessed by teachers' ratings of language/literacy ability, numeracy/mathematical thinking and approaches to learning. Comparison of group differences, using ANOVA, provided clear evidence that children who were identified as having speech and language impairment in their early childhood years did not perform as well at school, two years later, as their non-impaired peers on all three outcomes: Language and Literacy, Mathematical Thinking, and Approaches to Learning. The effects of early speech and language status on literacy, numeracy, and approaches to learning outcomes were similar in magnitude to the effect of family socio-economic factors, after controlling for child characteristics. Additionally, early identification of speech and language impairment (at age 4-5) was found to be a better predictor of school outcomes than sustained identification (at aged 4-5 and 6-7 years). Parent-reports of speech and language impairment in early childhood are useful in foreshadowing later difficulties with school and providing early intervention and targeted support from speech-language pathologists and specialist teachers.

Effect of amblyopia on the developmental eye movement test in children

Purpose. To investigate the functional impact of amblyopia in children, the performance of amblyopic and age-matched control children on a clinical test of eye movements was compared. The influence of visual factors on test outcome measures was explored. Methods. Eye movements were assessed with the Developmental Eye Movement (DEM) test, in a group of children with amblyopia (n = 39; age, 9.1 ± 0.9 years) of different causes (infantile esotropia, n = 7; acquired strabismus, n = 10; anisometropia, n = 8; mixed, n = 8; deprivation, n = 6) and in an age-matched control group (n = 42; age, 9.3 ± 0.4 years). LogMAR visual acuity (VA), stereoacuity, and refractive error were also recorded in both groups. Results. No significant difference was found between the amblyopic and age-matched control group for any of the outcome measures of the DEM (vertical time, horizontal time, number of errors and ratio(horizontal time/vertical time)). The DEM measures were not significantly related to VA in either eye, level of binocular function (stereoacuity), history of strabismus, or refractive error. Conclusions. The performance of amblyopic children on the DEM, a commonly used clinical measure of eye movements, has not previously been reported. Under habitual binocular viewing conditions, amblyopia has no effect on DEM outcome scores despite significant impairment of binocular vision and decreased VA in both the better and worse eye.

Hearing impairment affects older people’s ability to drive in the presence of distracters

OBJECTIVES: To investigate the effects of hearing impairment and distractibility on older people's driving ability, assessed under real-world conditions. DESIGN: Experimental cross-sectional study. SETTING: University laboratory setting and an on-road driving test. PARTICIPANTS: One hundred seven community-living adults aged 62 to 88. Fifty-five percent had normal hearing, 26% had a mild hearing impairment, and 19% had a moderate or greater impairment. ---------- MEASUREMENTS: Hearing was assessed using objective impairment measures (pure-tone audiometry, speech perception testing) and a self-report measure (Hearing Handicap Inventory for the Elderly). Driving was assessed on a closed road circuit under three conditions: no distracters, auditory distracters, and visual distracters. RESULTS: There was a significant interaction between hearing impairment and distracters, such that people with moderate to severe hearing impairment had significantly poorer driving performance in the presence of distracters than those with normal or mild hearing impairment. CONCLUSION: Older adults with poor hearing have greater difficulty with driving in the presence of distracters than older adults with good hearing.

Simulated visual impairment leads to cognitive slowing in older adults

PURPOSE: To investigate the impact of different levels of simulated visual impairment on the cognitive test performance of older adults and to compare this with previous findings in younger adults. METHODS.: Cognitive performance was assessed in 30 visually normal, community-dwelling older adults (mean = 70.2 ± 3.9 years). Four standard cognitive tests were used including the Digit Symbol Substitution Test, Trail Making Tests A and B, and the Stroop Color Word Test under three visual conditions: normal baseline vision and two levels of cataract simulating filters (Vistech), which were administered in a random order. Distance high-contrast visual acuity and Pelli-Robson letter contrast sensitivity were also assessed for all three visual conditions. RESULTS.: Simulated cataract significantly impaired performance across all cognitive test performance measures. In addition, the impact of simulated cataract was significantly greater in this older cohort than in a younger cohort previously investigated. Individual differences in contrast sensitivity better predicted cognitive test performance than did visual acuity. CONCLUSIONS.: Visual impairment can lead to slowing of cognitive performance in older adults; these effects are greater than those observed in younger participants. This has important implications for neuropsychological testing of older populations who have a high prevalence of cataract.

Test and evaluation system for multi-protocol sampled value protection schemes

Proposed transmission smart grids will use a digital platform for the automation of substations operating at voltage levels of 110 kV and above. The IEC 61850 series of standards, released in parts over the last ten years, provide a specification for substation communications networks and systems. These standards, along with IEEE Std 1588-2008 Precision Time Protocol version 2 (PTPv2) for precision timing, are recommended by the both IEC Smart Grid Strategy Group and the NIST Framework and Roadmap for Smart Grid Interoperability Standards for substation automation. IEC 61850-8-1 and IEC 61850-9-2 provide an inter-operable solution to support multi-vendor digital process bus solutions, allowing for the removal of potentially lethal voltages and damaging currents from substation control rooms, a reduction in the amount of cabling required in substations, and facilitates the adoption of non-conventional instrument transformers (NCITs). IEC 61850, PTPv2 and Ethernet are three complementary protocol families that together define the future of sampled value digital process connections for smart substation automation. This paper describes a specific test and evaluation system that uses real time simulation, protection relays, PTPv2 time clocks and artificial network impairment that is being used to investigate technical impediments to the adoption of SV process bus systems by transmission utilities. Knowing the limits of a digital process bus, especially when sampled values and NCITs are included, will enable utilities to make informed decisions regarding the adoption of this technology.

Performance of a cognitive, but not visual, secondary task interacts with alcohol-induced balance impairment in novice and experienced motorcycle riders

The appropriateness of applying drink driving legislation to motorcycle riding has been questioned as there may be fundamental differences in the effects of alcohol on driving and motorcycling. It has been suggested that alcohol may redirect riders’ focus from higher-order cognitive skills such as cornering, judgement and hazard perception, to more physical skills such as maintaining balance. To test this hypothesis, the effects of low doses of alcohol on balance ability were investigated in a laboratory setting. The static balance of twenty experienced and twenty novice riders was measured while they performed either no secondary task, a visual (search) task, or a cognitive (arithmetic) task following the administration of alcohol (0%, 0.02%, and 0.05% BAC). Subjective ratings of intoxication and balance impairment increased in a dose-dependent manner in both novice and experienced motorcycle riders, while a BAC of 0.05%, but not 0.02%, was associated with impairments in static balance ability. This balance impairment was exacerbated when riders performed a cognitive, but not a visual, secondary task. Likewise, 0.05% BAC was associated with impairments in novice and experienced riders’ performance of a cognitive, but not a visual, secondary task, suggesting that interactive processes underlie balance and cognitive task performance. There were no observed differences between novice vs. experienced riders on static balance and secondary task performance, either alone or in combination. Implications for road safety and future ‘drink riding’ policy considerations are discussed.

Association of hearing impairment and subsequent driving mobility in older adults

- Purpose of the study Hearing impairment (HI) is associated with driving safety (e.g., increased crashes and poor on-road driving performance). However, little is known about HI and driving mobility. This study examined the longitudinal association of audiometric hearing with older adults’ driving mobility over three years. - Design and Methods Secondary data analyses were conducted of 500 individuals (63-90 years) from the Staying Keen in Later Life (SKILL) study. Hearing (pure tone average of 0.5, 1, and 2 kHz) was assessed in the better hearing ear and categorized into normal hearing <25 dB HL; mild HI 26-40 dB HL; or moderate and greater HI>41 dB HL. The Useful Field of View Test (UFOV) was used to estimate the risk for adverse driving events. MANCOVA compared driving mobility between HI levels across time, adjusting for age, sex, race, hypertension, and stroke. Adjusting for these same covariates, Cox regression analyses examined incidence of driving cessation by HI across three years. - Results Individuals with moderate or greater HI performed poorly on the UFOV, indicating increased risk for adverse driving events (p<.001). No significant differences were found among older adults with varying levels of HI for driving mobility (ps>.05), including driving cessation rates (p=.38), across time. - Implications Although prior research indicates older adults with HI may be at higher risk for crashes, they may not modify driving over time. Further exploration of this issue is required to optimize efforts to improve driving safety and mobility among older adults.