Characterising derivative-based loan arrangements

The income tax and GST laws contain an array of rules that apply to debt and gains in the nature of interest. The definitions of 'debt' or 'loan' and amounts in the nature of 'interest' vary across the provisions and tax officials, taxpayers and courts must decide whether the terms should be read as applying to debt, loans or interest in a narrow legal sense or should be read more broadly to catch multi-element arrangements that give effect to a debt or loan relationship in an economic or commercial sense but not in conventional single document form. This article reviews the UK, US and Australian approaches to interpreting multi-element transactions and considers whether four tax provisions dealing with debt should be interpreted to apply to multi-element, derivative-based loan arrangements.

Correct weight? analysing Australian football through a derivative global or cultural cringe model

The application of a 'global' model, in practice usually British or American, and generalised sociological concepts to a particular sport and its social and cultural context is not always appropriate. In Australian academia, the custom is particularly appealing, due to the Australian colonial 'cultural cringe', the pattern of automatic deference to overseas (termed 'international') knowledge. This article argues that 'Fresh Prince of Coloma! Dome: Indigenous Logic in the AFL' (Football Studies, 8(1), 2005) inappropriately applies American sociological, and American football, logic to the indigenous Australian game Australian football, which differs in character both as a game and in its social, cultural and political context. The three researchers do not take account of the factors of height and weight in Australian football, and the average size of Aboriginal players, and of the relationship between speed and strength in the game as strategies and tactics change. Both omissions constitute fundamental flaws. American football and sports sociology's ideas of 'central position theory', with a suggestion of underlying racism, is of limited relevance to Australian football. It is also possible that the American sitcom, Fresh Prince of Bel Air, was neither a helpful muse nor a suitable metaphor for research into this subj ect. In Australian football, a game in which few 'central positions' are crucial and in which 'leadership positions' can be found in many parts of the ground, including the half-back flank and the wing, neither size nor position are the only major determinants of significance in the team.

On the determinants of derivative usage by Australian companies

This paper provides an examination of the determinants of derivative use by Australian corporations. We analysed the characteristics of a sample of 469 firm/year observations drawn from the largest Australian publicly listed companies in 1999 and 2000 to address two issues: the decision to use financial derivatives and the extent to which they are used. Logit analysis suggests that a firm's leverage (distress proxy), size (financial distress and setup costs) and liquidity (financial constraints proxy) are important factors associated with the decision to use derivatives. These findings support the financial distress hypothesis while the evidence on the underinvestment hypothesis is mixed. Additionally, setup costs appear to be important, as larger firms are more likely to use derivatives. Tobit results, on the other hand, show that once the decision to use derivatives has been made, a firm uses more derivatives as its leverage increases and as it pays out more dividends (hedging substitute proxy). The overall results indicate that Australian companies use derivatives with a view to enhancing the firms' value rather than to maximizing managerial wealth. In particular, corporations' derivative policies are mostly concerned with reducing the expected cost of financial distress and managing cash flows. Our inability to identify managerial influences behind the derivative decision suggests a competitive Australian managerial labor market.

Derivative actions as a mechanism for the protection of minority shareholders in China: a result of convergence or divergence

The protection of minority shareholders has become one of the key features of company law reform in many countries in recent years. Various mechanisms have been created to achieve this objective. Australia has introduced the statutory derivative action procedure mainly based on models drawn from Canada and New Zealand; this provision was inserted into the Corporations Act in March 2000. China has also adopted a similar mechanism – known as the shareholder representative action; this scheme was based upon China’s understanding of statutory derivative actions in Western countries. China’s derivative action mechanism is reflected in amendments to the 2005 PRC Company Law and 2005 Securities Law that both were passed on 27 October 2005 and came into effective on 1 January 2006. The development of statutory derivative actions in different countries demonstrates the interaction between forces of convergence and divergence in company law reforms. This article reviews different mechanisms adopted in the Chinese law for the protection of minority shareholders. It especially focuses on an analysis of the nature of the shareholder representative action and the procedures for its utilisation in China – the equivalent to Western countries’ derivative actions. In comparison with statutory derivative actions in Australia, this article argues that the concept of the shareholder representative action in China rests upon a misunderstanding of Western derivative actions; this has involved a compromise between the dire need to protect shareholders and the ambiguities of a weak court system. As a consequence, China’s reforms in this area are largely a tentative gesture and are therefore unlikely to be very effective.

Fractional polynomials and model selection in generalized estimating equations analysis, with an application to a longitudinal epidemiologic study in Australia

In epidemiologic studies, researchers often need to establish a nonlinear exposure-response relation between a continuous risk factor and a health outcome. Furthermore, periodic interviews are often conducted to take repeated measurements from an individual. The authors proposed to use fractional polynomial models to jointly analyze the effects of 2 continuous risk factors on a health outcome. This method was applied to an analysis of the effects of age and cumulative fluoride exposure on forced vital capacity in a longitudinal study of lung function carried out among aluminum workers in Australia (1995-2003). Generalized estimating equations and the quasi-likelihood under the independence model criterion were used. The authors found that the second-degree fractional polynomial models for age and fluoride fitted the data best. The best model for age was robust across different models for fluoride, and the best model for fluoride was also robust. No evidence was found to suggest that the effects of smoking and cumulative fluoride exposure on change in forced vital capacity over time were significant. The trend 1 model, which included the unexposed persons in the analysis of trend in forced vital capacity over tertiles of fluoride exposure, did not fit the data well, and caution should be exercised when this method is used.

Does the type of derivative instrument used by companies impact firm value?

We explore the relationship between the type of derivative instrument used and firm value, in a sample of Australian firms. Specifically, we examine the impact of the corporate use of swaps, futures, forwards and options, and the extent of such usage, on firm value. Our findings suggest that a 'discount' is most severely imposed on users of swaps.

Aspergillus species, cyclic dimeric dipeptide derivative substance P antagonist biosynthetic products thereof, and process for preparation thereof

A novel Aspergillus species, cyclic dimeric dipeptide derivatives which are biosynthetic products thereof and are useful as Substance P antagonists and therefore as analgesic and/or antiinflammatory agents, and a process for preparation of the biosynthetic products are disclosed.

Derivative-free optimization and neural networks for robust regression

Large outliers break down linear and nonlinear regression models. Robust regression methods allow one to filter out the outliers when building a model. By replacing the traditional least squares criterion with the least trimmed squares (LTS) criterion, in which half of data is treated as potential outliers, one can fit accurate regression models to strongly contaminated data. High-breakdown methods have become very well established in linear regression, but have started being applied for non-linear regression only recently. In this work, we examine the problem of fitting artificial neural networks (ANNs) to contaminated data using LTS criterion. We introduce a penalized LTS criterion which prevents unnecessary removal of valid data. Training of ANNs leads to a challenging non-smooth global optimization problem. We compare the efficiency of several derivative-free optimization methods in solving it, and show that our approach identifies the outliers correctly when ANNs are used for nonlinear regression.

The sampling and remix dilemma: what is the role of moral rights in the encouragement and regulation of derivative creativity

The borrowing and rearrangement of musical content, especially in the digital context, raises difficult questions for copyright law. There is significant community support for a loosening of the restrictions on the derivative (and particularly creative) use of copyright material. Law reform is called for. This paper discusses the possible introduction of a new exception to copyright infringement but notes that in the drafting of any such exception not only the economic rights but also the moral rights of the originating author need to be taken into account.

A fractional cointegration approach to testing the Ohlson accounting based valuation model

We examine the long-run relationship between market value, book value, and residual income in the Ohlson (Contemp Acc Res 11(2):661-687, 1995) model. In particular, we test if market value is cointegrated with book value and residual income in light of their non-stationary behaviors. We find that cointegration applies to only 51 % of the sample firms, casting doubt that book value and residual income alone are adequate in tracking variations in market value, yet we find that market value is fractional cointegrated with book value and residual income for 89 % of the sample firms. This implies that the long-run relationship follows a slow but mean-reverting process. Our results therefore support the Ohlson model. © 2012 Springer Science+Business Media New York.

Blind extraction using fractional lower-order statistics

In traditional method to blindly extract interesting source signals sequentially, the second-order or higher-order statistics of signals are often utilized. However, for impulsive sources, both of the second-order and higher-order statistics may degenerate. Therefore, it is necessary to exploit new method for the blind extraction of impulsive sources. Based on the best compression-reconstruction principle, a novel model is proposed in this work, together with the corresponding algorithm. The proposed method can be used for blind extraction of sources which are distributed from alpha stable process. Simulations are given to illustrate availability and robustness of our algorithm.