Reversal of impairment losses, firm performance and reporting incentives: Evidence from Malaysia

Malaysian Financial Reporting Standard (FRS) No. 136, Impairment of Assets, was issued in 2005. The standard requires public listed companies to report their non-current assets at no more than their recoverable amount. When the value of impaired assets is recovered, or partly recovered, FRS 136 requires the impairment charges to be reversed to its new recoverable amount. This study tests whether the reversal of impairment losses by Malaysian firms is more closely associated with economic reasons or reporting incentives. The sample of this study consists of 182 public companies listed on Bursa Malaysia (formerly known as the Kuala Lumpur Stock Exchange) that reported reversals of their impairment charges during the period 2006-2009. These firms are matched with firms which do not reverse impairment on the basis of industrial classification and size. In the year of reversal, this study finds that the reversal firms are more profitable (before reversals) than their matched firms. On average, the Malaysian stock market values the reversals of impairment losses positively. These results suggest that the reversals generally reflect increases in the value of the previously impaired assets. After partitioning firms that are likely to manage earnings and those that are not, this study finds that there are some Malaysian firms which reverse the impairment charges to manage earnings. Their reversals are not value-relevant, and are negatively associated with future firm performance. On the other hand, the reversals of firms which are deemed not to be earnings managers are positively associated with both future firm performance and current stock price performance, and this is the dominant motivation for the reversal of impairment charges in Malaysia. In further analysis, this study provides evidence that the opportunistic reversals are also associated with other earnings management manifestations, namely abnormal working capital accruals and the motivation to avoid earnings declines. In general, the findings suggest that the fair value measurement in impairment standard provides useful information to the users of financial statements.

Strategies to prevent potentially inappropriate prescribing and adverse drug reactions in older patients

INTRODUCTION: Potentially inappropriate prescribing (PIP) is a major contributor to adverse drug reactions and overall increased healthcare costs. The aim of this thesis was to identify, develop and implement strategies with the potential to prevent PIP and ADRs in older patients. METHODS: A systematic review of the qualitative literature (Meta-synthesis); A qualitative study in Irish hospitals; A randomised controlled trial (RCT) to assess the impact of an online educational module on doctors’ prescribing knowledge and confidence; Exploration of the potential for a frailty index score to enable doctors identify patients at increased risk of PIP and ADRs; Exploration of the potential for the SHiM tool to enable doctors to optimise prescribing for older patients. RESULTS: The meta-synthesis identified four key concepts: (i) Desire to please the patient; (ii) Feeling of being forced to prescribe; (iii) Tension between experience and guidelines; (iv) Prescriber fear. Similar themes also emerged from the qualitative study. In the RCT, the online educational module resulted in a highly significant 22% difference in test scores between intervention and control groups. The studies exploring the frailty index score showed a significant positive relationship between a patient’s frailty status and their likelihood of experiencing PIP/ADRs. Patients above a frailty threshold of 0.16 were at least twice as likely to experience PIP/ADRs. SHiM was found to be a useful tool in terms of reconciling patients’ medications. However, the evidence for it being capable of preventing clinically relevant adverse events was poor. CONCLUSION:Qualitative research in this thesis has proposed novel theories relating to the causative factors of PIP in older patients. In doing so, it has identified several areas for intervention and laid down a road map for future research.