Self-education expenses: some thoughts for taxpayers and their advisers

With the advent of another tax year, the nature and form of self-education expenses come to mind. The income tax return for individuals makes a perceived distinction between forms of education for tax purposes but it may not be that clear for taxpayers and their advisers. Item D4 of the individual tax return allows for taxpayers to make a claim for work related self education expenses that relate to formal qualifications from a school, college or university. The individual tax return implies that there is a distmction between formal self-education and informal self-education. However when one looks at the relevant Australian Tax Office (ATO) material, this distinction could easily be over-looked.

Council amalgamations and restructuring in Victoria: how did we value the assets and liabilities?

This study aimed to identify and critically analyse the methodologies and accounting treatments adopted in the transfer of assets, liabilities, revenues and expenses resultingfrom municipal boundary changes associated with municipal restructuring (amalgamations) in Victoria during the early 1990s. In involved the collection and use of oral evidence obtained from officers of a sample of entities engaged in the process and focused on identifying and examining the methodologies used by municipalities. It has also been shown that local government is different from the commercial domain and the accounting profession has not adequately addressed some of these differences.

Changing governance mechanisms and its impact on Australian Building Societies' performance

This paper examines the relation between the governance mechanism (ownership structure) and performance of Australian building societies. Financial performance measures, provided by financial ratios of the major mutual building societies in Australia are used to explore their behaviour under different governance structures in the 1980s and 1990s. The theoretical and empirical literature has suggested that mutual deposit-taking institutions should have lower profitability and higher operating expenses than their publicly listed counterparts. Accounting ratios are observed over time to investigate if governance change in mutual deposit-taking organizations accounted for any discernable differences in profitability and cost efficiency pre- and postdemutualisation.

Accounting for local government boundary changes in South Australia : valuing assets and liabilities or valuing revenue streams

This paper examines the methodologies adopted in the transfer of assets, liabilities, revenues and expenses resulting from boundary changes associated with municipal amalgamations in South Australia during the late 1990s. It investigates the methods employed for apportioning these financial elements, valuations used and financial settlements required. Significant transfers occurred in only three cases. In two cases, councils used simple, pragmatic methods to apportion assets and liabilities, similar to those used previously in Victoria. In the third case a transfer price was calculated based on the net present value of revenues. This method is quite different from previous methods examined and is appropriate where one council will make significant future gains at another council's loss because of net revenue transfers.

Does organizational structure matter? The behaviour of Australian Building Societies pre-and post-demutualization

Financial performance measures, provided by accounting-based financial ratios, of the major mutual building societies in Australia are used to explore their behaviour pre-and post-demutualization in the 1980s and 1990s. The theoretical and empirical literature has suggested that mutual deposit-taking institutions would have lower profitability and higher operating expenses than their publicly listed counterparts. Common accounting ratios are observed over time to investigate if ownership change in a mutual deposit-taking organization accounted for any discernable differences in profitability and cost efficiency of the firms after conversion.

Lifecycle cost and CO2 emission comparison of conventional and rationalized bridges

The construction industry consumes a great deal of natural resources and energy in constructing, maintaining and demolishing their products such as buildings and bridges. These activities lead significant impacts on global and regional environments in addition to their economic expenses. In this research, the lifecycle cost (LCC) and lifecycle CO₂ (LCCO₂) emission of newly developed bridges, including the minimized girder, rationalized box-girder and rationalized truss bridges, are quantified and compared with those of the conventional I-girder, box-girder and truss bridges. It was found that the newly developed types of bridges have lower values in both LCC and LCCO₂ than the corresponding conventional bridges do. The effects of span lengths on LCC and LCCO₂ are studied for both conventional and rationalized bridges. The characteristics of LCC and LCCO₂ are investigated over the lifecycle of a bridge including its construction, maintenance and replacement stages.

Concise income tax

The fourth edition of this standard text on taxation law continues to provide a comprehensive, yet succinct, examination of the most important areas of income taxation law. Almost every chapter in the book has had to be updated to reflect recent legislative amendments and judicial determinations including the changes to tax administration, particularly with regard to non-ruling ATO advice, rulings, and amended assessments; the controversial promoter penalty provisions which were introduced to deter the promotion of tax avoidance schemes; the new category of taxpayers, "temporary residents," who enjoy many of the benefits of non-residents; the significant expansion of the allowable expenses for capital gains purposes which has arisen as a result of changes to the cost base; the limiting of the deductibility of losses and outgoings pertaining to certain illegal activities; and the increase in the types of expenses that may be deducted under the "blackhole" provisions in Div 40-I.

Organisation change and its impact on Australian Building Societies' performance

The paper examines the relation between changing ownership structure and performance of Australian building societies. An analysis and discussion of the theories of organizational development and change is undertaken to explore the mutual building societies' motivation for change. The financial performance measures, provided by financial ratios of the major mutual building societies in Australia, are examined to assess the behaviour of building societies under different governance structures in the 1980s and 1990s. The theoretical and empirical literature has suggested that mutual deposit-taking institutions should have lov^^er profitability and higher operating expenses than their publicly listed counterparts. Accounting ratios are observed over time to investigate if governance change in mutual deposit-taking organizations accounted for any discernable differences in profitability and cost efficiency pre- and post- demutualization. The study finds support for the contention that demutualized building societies will have higher profitability and lower costs than their mutual counterparts. The study is confined to investigation of the six largest building societies that undertook the demutualization process. It could he extended to the entire building society sector. The results have implications for investors, managers and 'ovraers' of firms that retain their mutual structure, suggesting the demutualization vnû benefit these groups. There is no study that compares mutual deposit-taking institutions pre- and post-conversion in Australia.

A longitudinal study of economic pressure among people living with a progressive neurological illness

Objectives: Previous research has examined costs associated with progressive neurological illnesses, but has not examined predictors of economic pressure, or quality of life (QOL). The aim of the current study was to examine the predictors of both economic pressure and QOL among people with a range of progressive neurological illness.

Method: Participants were 257 people with motor neurone disease, Huntington’s disease, multiple sclerosis and Parkinson’s.

Results: High levels of cut backs in spending predicted economic pressure for all groups. Economic pressure predicted QOL at 12-month follow-up for all groups except Parkinson’s. For Parkinson’s, predictors of QOL were long duration of illness, illness-related expenses and cut backs in spending. Cut backs in spending, and not income or expenses, were the most important predictor of economic pressure. QOL was predicted by high levels of economic pressure for most of the illness groups.

Discussion: The implications of these findings are discussed. They suggest that cut backs in spending, as opposed to income and expenses, are important factors to focus on assisting people to adjust to the changes to their financial situation that frequently occurs after developing one of these progressive neurological illnesses.

Accounting problems and issues in cases of municipal boundary changes

Analyses the methodologies and accounting treatments used for the transfer of assets, liabilities, revenues and expenses resulting from municipal restructuring in Victoria during the early 1990s. It was found that most municipalities adopted simple or pragmatic methods, whereby fixed assets and associated liabilities were allocated physically avoiding the need for financial valuations.

Advice on online assessment

A good deal of investigation and development is underway in Australian universities into the possibilities for effective and efficient on-line and computer-based assessment. The current commercial ‘virtual learning environments’, which integrate various curriculum elements at subject level into a single software portal, usually offer various built-in options for student assessment. As well, many on-line assessment initiatives are being locally developed to suit specific curriculum needs.

There are many reasons why on-line assessment is being adopted by Australian universities. Many academics are seeking to diversify assessment tasks, broaden the range of skills assessed and provide students with more timely and informative feedback on their progress. Others are wishing to meet student expectations for more flexible delivery and to generate efficiencies in assessment that can ease academic staff workloads. All staff involved in such initiatives are discovering they face a large number of technical and educational decisions.

The move to on-line and computer based assessment is a natural outcome of the increasing use of information and communication technologies to enhance learning. As more students seek flexibility in their courses, it seems inevitable there will be growing expectations for flexible assessment as well.

At the same time, in a climate of increasing academic workloads, the adoption of on-line assessment may help to manage large volumes of marking and assessment-related administration efficiently. The automation of routine on-line tasks, in particular, may have the potential in the long-term to provide time/cost-efficient student assessment, though the present evidence suggests that some on-line assessment, at least in the early stages, can add significantly both to staff workload and to overall expenses.

The economic impact of progressive neurological illness on quality of life in Australia

The current study examined the impact of financial costs and self-reported economic pressure on the quality of life of patients with progressive neurological illness. Participants were 423 people from four illness groups in Australia. Participants completed measures of: 1. quality of life, 2. income, 3. expenses, 4. economic pressure, 5. social support, 6. relationship satisfaction, and 7. severity of illness. There was a strong negative association between quality of life and economic pressure (but not income or expenses) for all groups. Subjective assessment of economic pressure was strongly associated with quality of life for people with motor neurone disease and multiple sclerosis. Implications of these results for assisting people with progressive neurological illnesses to cope with the financial changes that occur due to their illness are discussed.

A psychological contract perspective to the link between non-profit organizations' management practices and volunteer sustainability

This study applies the concept of the psychological contract to the relationship between management practices and volunteers. Formalization of the voluntary sector is impacting on volunteers’ experiences and may breach the psychological contract from the volunteers’ perspective. This mixed method study interviewed 67 volunteers and volunteer coordinators/administrators, and collected mail survey information from 152 volunteer organizations. The transactional management practices of keeping formal records and not paying volunteers out of pocket expenses are negatively associated with volunteer recruitment and retention. Alternatively, publicly recognizing volunteers through a volunteer newsletter supports volunteers’ relational expectations and is positively linked to adequate volunteer numbers. Our findings have important implications for the human resource development practices of non-profit organizations in dealing with their volunteers: they suggest that the relational expectations of volunteers are an important aspect of the psychological contract, which could be used by organizations as a framework for developing management practices that fit the volunteer ethos of trust and networks.

Does the change of accounting regulation on employee share options give rise to greater scope for earnings management?

Purpose – The purpose of this paper is to address the concern about the impact of accounting regulatory change pertaining to employee share options (ESOs) on earnings management. Following Australia’s adoption of International Financial Reporting Standards (IFRS) in 2005, companies are required to recognise the fair value of ESOs as expenses. Due to inherent imprecision in the estimate of ESO’s fair value, the regulatory change from disclosure to recognition was widely claimed to potentially give rise to an alternative mechanism to manage earnings. This study provides empirical evidence on whether the regulatory change leads to earnings management problems.

Design/methodology/approach – This study uses the regulatory change in accounting for ESOs to provide a direct test of earnings management between disclosed versus recognised regimes for the same sample of firms. The sample consists of Australian firms from S&P/ASX300 for the period from 2003 to 2006.

Findings – The results show that, although the accounting regulatory change from disclosure to recognition may provide an alternative earnings management vehicle, there is no evidence of this occurring. There could be several reasons for this finding. First, the statistical tests lack power. Second, there are stricter audit tests on recognised amounts than on disclosed amounts. Third, given the concern of excessive pay and the close scrutiny of compensation, managers may have already understated ESO values in the disclosure regime. Finally, managers have limited time and resources and the effort involved in the adoption of IFRS in 2005 could have restricted the time available to manage earnings via the ESO reporting channel.

Originality/value – This study adds to the limited research on whether a change in accounting regulation for employee share options from disclosure to recognition gives rise to greater scope for earnings management. One reason for the lack of empirical evidence in the research is due to the problem of designing a test. Bernard and Schipper suggest that within-firm studies have limitations for comparing the effects of recognition versus disclosure when the change is driven by an estimate becoming more reliable. A cross-sectional study is also problematic due to self-selection bias if firms can choose between disclosure versus recognition. This study circumvents potential design problems raised by Bernard and Schipper by setting a test using regulatory change which allows the test to be compared directly using the same company.

The direct costs of raising external equity capital for US REIT IPOs

Purpose – The purpose of this paper is to investigate the total direct costs of raising external equity capital for US real estate investment trust (REIT) initial public offerings (IPOs).

Design/methodology/approach – The study provides recent evidence on total direct costs for a comprehensive dataset of 125 US REIT IPOs from 1996 until June 2010. A multivariate OLS regression is performed to determine significant factors influencing the level of total direct costs and also underwriting fees and non-underwriting direct expenses.

Findings – The study finds economies of scale in total direct costs, underwriting fees and non-underwriting expenses. The equally (value) weighted average total direct costs are 8.33 percent (7.52 percent), consisting of 6.49 percent (6.30 percent) underwriting fees and 1.87 percent (1.22 percent) non-underwriting direct expenses. The study finds a declining trend of total direct costs for post 2000 IPOs which is attributed to the declining trend in both underwriting fees and non-underwriting direct expenses. Offer size is a critical determinant for both total direct costs and their individual components and inversely affects these costs. The total direct costs are found significantly higher for equity REITs than for mortgage REITs and are also significantly higher for offers listed in New York Stock Exchange (NYSE). Underwriting fees appear to be negatively influenced by the offer price, the number of representative underwriters involved in the issue, industry return volatility and the number of potential specific risk factors but positively influenced by prior quarter industry dividend yield and ownership limit identified in the prospectus. After controlling for time trend, the paper finds REIT IPOs incur higher non-underwriting direct expenses in response to higher industry return volatility prior to the offer.

Originality/value – This paper adds to the international REIT IPO literature by exploring a number of new influencing factors behind total direct costs, underwriting fees and non-underwriting direct expenses. The study includes data during the recent GFC period.