Application of the fair-value concept : evidence from Australian legal decisions

The concept of "fair value" is increasingly being incorporated into Australian and international accounting standards and pronouncements. The fair-value concept has also been established and developed in Australian legal cases, and an examination of pertinent court decisions is of interest to accountants. By examining and analysing relevant cases, the paper highlights some of the principles and difficulties involved in operationalising the fair-value concept for accounting and legal purposes, particularly in situations where the asset being valued is subject to imperfect or incomplete markets.

Social value measurement and nonprofit organizations: preliminary views of nonprofit and foundation managers

This paper examines how managers of nonprofit organizations and foundations view the measurement of the social value of these organizations. In exploratory interviews, we found that the managers generally agree that objective measures are desired where and when possible, but recognise the difficulties in developing an assessment that enables comparisons across the nonprofit sector. These difficulties, as well as the implications for developing assessments of social value for nonprofit organizations, are discussed

Social intervention or market intervention? A problem for governments in promoting the value of the Arts

The research design for this paper is based on the critical need for greater emphasis by Australian arts organizations on relationship marketing as a means of achieving sustainability. Recent injections of government funds into the performing arts in Australia, to meet a "crisis" in financial viability and audience development, highlighted the dependence of arts organizations on government funds in building audiences. A hypothesis was developed through an analysis of the literature on relationship marketing, cultural economics and value measurement, and an analysis of the long-term outcomes of government strategies for the funding of arts marketing. The hypothesis is that while social intervention is acceptable (even desirable and necessary), and achieves the social goals of governments, market intervention reduces the benefits of relationship-building and the exchange of values between arts organizations and their audiences.

Analysis of government documents and primary research in audience development proved the hypothesis. Empirical research resulted in the development of a theory and model that describe the limits of market intervention and in the development of a definition of values in the continuum of government activity from social to market intervention. The model could be useful for governments in developing arts policy with regard to audiencebuilding. It could also be useful in demonstrating to arts managers that sustainability results not from government funding but rather from relationship-marketing strategies.

Unravelling cultural value

Unravelling cultural value has long been attempted from a number of perspectives but it remains substantially unresolved. The discussion is about accountability with proponents disagreeing on whether this means stewardship of the public and trustee purse or fundamental aesthetic values. There are many reasons for this lack of agreement and thus the cultural value debates remain vibrant and healthy. However, it is also a truism that cultural related literature has been slow to recognise that cultural value serves different masters: the audience, organisational interface, the organisation, and government control. In past debates, value measurement has had a government control focus using neo classical economics and accounting to define and measure the cultural industry. Artists and other cultural stakeholders in society have critiqued such measurement as inappropriate. This paper seeks to unify these two dimensions by providing a synergistic definition of cultural value, which is pertinent to cultural organisations, and offers a model of entrepreneurial cultural value balance for the audience, cultural organisations and government.

Valuation and reporting of native fauna in monetary terms: compatibility between a market-Based system and natural resources?

A change in community values and priorities has introduced ethical,
environmental and social issues into the way in which business conducts
its activities. There are an increasing number of managed investment funds focusing on socially responsible investment (SRI) by concentrating on firms that operate according to predetermined criteria for environmental, social and ethical issues. For investors in these funds environmental stewardship issues are integrated with concern over financial resources and performance. In this paper the accounting and reporting by business activities concerned with conservation of wildlife are examined. The world of accounting has functioned for many years with relatively few accounting standards devoted to specialised industry needs. In 1998 the Australian Accounting Standards Board and in 2001 the International Accounting Standards Board issued standards devoted to agriculture. Both standards deal with the reporting of managed biological assets and require application of essentially the same approaches despite the Australian standard requiring net market value while the International standard requires fair value. In this paper we analyse how one conservation firm Earth Sanctuaries Ltd. (ESL) has applied AASB 1037 and then we explore the implications for conservation firms operating in geographical locations outside Australia. It is suggested that AASB 1037 and indeed lAS 41 may not provide value appropriate information for investor decisions relating to accounting profits for such firms. Our examination shows that it is appropriate to reconsider accounting guidelines provided by these standards in order to link the information relating to economic and environmental performance. Transparency may be improved by a move closer to Elkington 's (1997) triple bottom line reporting. We therefore contend that the issues arising from the use ofAASB 1037 and lAS 41 need to be widely considered by all standard setters, particularly given the increasing attention to SRI.

Implications of the IFRS goodwill accounting treatment

Purpose – This paper aims to critically examine the change in accounting treatment for goodwill pursuant to international financial reporting standards (IFRSs) by reference to the Australian reporting regime.

Design/methodology/approach – The paper discusses and compares the former Australian and the new IFRS treatments for goodwill. This comparison focuses on the advantages and potential complexities of the new method, with the aim of identifying the issues and challenges that preparers, independent auditors and those involved in corporate governance face in complying with the new requirements.

Findings – The paper highlights that the identification and valuation of cash-generating units and goodwill require numerous assumptions to be made in estimating fair value, value in use and recoverable amount. Considerable ambiguity and subjectivity are inherent in the IFRS requirements.

Research limitations/implications – Findings suggest that future research should examine how financial report preparers and corporate governance mechanisms are dealing with the complex change required by the new goodwill accounting treatment and how the many critical issues involved in auditing the resulting figures are being addressed.

Practical implications – The research has practical implications for financial report preparers in identifying the issues that must be addressed in complying with the international goodwill accounting treatment. In turn, the paper highlights conceptual issues of relevance to auditors in their role of providing assurance on the resulting accounting numbers. It also has implications for others involved in corporate governance, such as audit committee members, in emphasising the areas in which they should be providing oversight of the accounting judgments. These issues are of relevance in any reporting regime based on IFRSs.

Originality/value – While much has been written about the mechanics of the new goodwill accounting requirements, there has been a lack of critical research highlighting the many problems and ambiguities that will arise in the application of those rules.

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.

Brand value in the context of Australian Football League clubs

This conceptual paper focuses on brand value for non-traditional products, and particularly, brand value in relation to Australian Football League Clubs, and its measurement. The concept of brand value has been addressed by a plethora of definitions and models in the literature, many of which focus on the measurement of brand value within traditional product industries. These models are often contingent on the intrinsic utility of the product itself, yet within non-traditional product areas, the product and the brand may be two distinct entities which should be differentiated in order to facilitate an accurate measurement of consumer-based brand value. To date, there has been limited research in this area and the general aim of this paper is to reveal the gaps in the current literature by providing an extension of traditional brand valuation theory to a non-traditional field. This paper illustrates its points with reference to a relevant model associated with “traditional” brand theories, and shows how it can be applied to the area of Australian Football League Clubs. This paper argues for the configuration of a more holistic model of brand value, including the antecedents and consequences of the value ascribed to brands by consumers, in order to encourage future research in brand equity based on the total utility derived from Australian Football League Clubs’ brands.

Accounting measurement in the state

This paper critically analysis accounting measurements from social and cultural values perspectives. By applying Hofstede (1980), Gray (1988), and Perera (1989) studies, first of all the study develop a theory to concern accounting values in a religious perception. Then Islam as a religion consider as a instance. Islamic compliance accounting measurement has developed in next stage to understand how the accounting value could be different from this viewpoint. A detail of those differences is portrayed to clearly understand with those accounting measurement are practicing in a called Western accounting measurement. The finding of the paper can be initially useful for considering in harmonization issues of accounting practices globally as well as a possible alternative for conservative accounting measurement.

Accounting measurement in the religious perspective : conservatism or optimism

This paper concerns about accounting measurements from the socio cultural values’ perspectives. By applying Hofstede (1980), Gray (1988), and Perera (1989) studies, first of all, the study develops a theory to concern about accounting values in a religious perception. Then Islam, as one of the most debatable religion in the world, is considered as an instance. Islamic compliance accounting measurement has developed in next stage to understand how the accounting value could be different from this viewpoint from the Western conservative historical cost. This study theoretically proves that Islamic compliance accounting measurement conforms to the exit price method which is different from the Western complaisance accounting measurement.

Measurement of the economic impact of visual impairment from age-related macular degeneration in Australia

The purpose of this report was to: (i) outline the potential value of health economic studies into age-related macular degeneration (AMD); (ii) provide an overview of health economic studies pertinent to AMD; and (iii) outline the basic frame work of cost-of-illness studies (a useful first step in applying economic methods). The detection and management of sensory loss in the elderly plays a key role in the Australian Government's Healthy Ageing Strategy. Age-related macular degeneration is currently the leading cause of blindness in elderly Australians. Although a large proportion of AMD cases remain untreatable, the introduction of photo­dynamic therapy provides a relatively expensive and possibly cost-effective innovation for others. Antioxidant therapy has also been proven effective in reducing progression of early to late disease. The discipline of economics can contribute to an understanding of AMD prevention and treatment through: (i) describing the current burden of disease; (ii) predicting the changes in the burden of disease over time, and (iii) evaluating the efficiency of different interventions. Cost-of-illness studies have been performed in many fields of medicine. Little work, however, has been done on describing the economic impact from AMD. A number of different economic evaluation methods can be used in judging the efficiency of possible interventions to reduce the disease burden of AMD. Although complementary in nature, each has specific uses and limitations. Studies of the economic impact of eye diseases are both feasible and necessary for informed health care decision-making.

The value of community-based monitoring in marine protected areas

There is an increasing realisation of the importance of community or volunteer collected data for management programs that are otherwise limited by the availability of funds or resources. However, there are concerns regarding the reliability of scientific data collected by inexperienced people. We investigated the potential for community-based monitoring in Victoria’s newly established system of Marine Protected Areas. The main objectives for the study were to 1) develop a template for the scientific monitoring of marine habitats suitable for community groups, 2) assess data quality and data integrity collected by community volunteers and 3) determine a sustainable model for ongoing community participation in monitoring marine habitats. Three different habitats (subtidal, intertidal, and seagrass) were investigated and data collected by volunteers across these habitats was compared to that collected by scientists. Reliability of data collected by volunteers was dependent on habitat type and the type of measurement the volunteers were required to make. Qualitative estimates made by volunteers were highly variable across all three habitat sites, compared to quantitative data collection. Subtidal monitoring had the greatest inaccuracy for data collection, whereas intertidal reef monitoring was most reliable. Sustainability of community-based monitoring programs is dependent on adequate training for volunteers and the development of partnerships to foster greater community engagement.

Investigation of telomere lengths measurement by quantitative real-time PCR to predict age

Currently DNA profiling methods only compare a suspect’s DNA with DNA left at the crime scene. When there is no suspect, it would be useful for the police to be able to predict what the person of interest looks like by analysing the DNA left behind in a crime scene. Determination of the age of the suspect is an important factor in creating an identikit. Human somatic cells gradually lose telomeric repeats with age. This study investigated if one could use a correlation between telomere length and age, to predict the age of an individual from their DNA. Telomere length, in buccal cells, of 167 individuals aged between 1 and 96 years old was measured using real-time quantitative PCR. Telomere length decreased with age (r = −0.185, P < 0.05) and the age of an individual could be roughly determined by the following formula: (age = relative telomere length −1.5/−0.005). The regression (R2) value between telomere length and age was not, vert, similar0.04, which is too low to be use for forensics. The causes for the presence of large variation in telomere lengths in the population were further investigated. The age prediction accuracies were low even after dividing samples into non-related Caucasians, males and females (5%, 9% and 1%, respectively). Mean telomere lengths of eight age groups representing each decade of life showed non-linear decrease in telomere length with age. There were variations in telomere lengths even among similarly aged individuals aged 26 years old (n = 10) and age 54 years old (n = 9). Therefore, telomere length measurement by real-time quantitative PCR cannot be used to predict age of a person, due to the presence of large inter-individual variations in telomere lengths.