The quality of financial information in the extractive industries: a value relevance analysis

The extractive industry is characterized by high levels of risk and uncertainty. These attributes create challenges when applying traditional accounting concepts (such as the revenue recognition and matching concepts) to the preparation of financial statements in the industry. The International Accounting Standards Board (2010) states that the objective of general purpose financial statements is to provide useful financial information to assist the capital allocation decisions of existing and potential providers of capital. The usefulness of information is defined as being relevant and faithfully represented so as to best aid in the investment decisions of capital providers. Value relevance research utilizes adaptations of the Ohlson (1995) to assess the attribute of value relevance which is one part of the attributes resulting in useful information. This study firstly examines the value relevance of the financial information disclosed in the financial reports of extractive firms. The findings reveal that the value relevance of information disclosed in the financial reports depends on the circumstances of the firm including sector, size and profitability. Traditional accounting concepts such as the matching concept can be ineffective when applied to small firms who are primarily engaged in nonproduction activities that involve significant levels of uncertainty such as exploration activities or the development of sites. Standard setting bodies such as the International Accounting Standards Board and the Financial Accounting Standards Board have addressed the financial reporting challenges in the extractive industry by allowing a significant amount of accounting flexibility in industryspecific accounting standards, particularly in relation to the accounting treatment of exploration and evaluation expenditure. Therefore, secondly this study examines whether the choice of exploration accounting policy has an effect on the value relevance of information disclosed in the financial reports. The findings show that, in general, the Successful Efforts method produces value relevant information in the financial reports of profitable extractive firms. However, specifically in the oil & gas sector, the Full Cost method produces value relevant asset disclosures if the firm is lossmaking. This indicates that investors in production and non-production orientated firms have different information needs and these needs cannot be simultaneously fulfilled by a single accounting policy. In the mining sector, a preference by large profitable mining companies towards a more conservative policy than either the Full Cost or Successful Efforts methods does not result in more value relevant information being disclosed in the financial reports. This finding supports the fact that the qualitative characteristic of prudence is a form of bias which has a downward effect on asset values. The third aspect of this study is an examination of the effect of corporate governance on the value relevance of disclosures made in the financial reports of extractive firms. The findings show that the key factor influencing the value relevance of financial information is the ability of the directors to select accounting policies which reflect the economic substance of the particular circumstances facing the firms in an effective way. Corporate governance is found to have an effect on value relevance, particularly in the oil & gas sector. However, there is no significant difference between the exploration accounting policy choices made by directors of firms with good systems of corporate governance and those with weak systems of corporate governance.

Attitudes towards the Marine Environment and Implications for Marine Resource Management in Seward, Alaska

This research, conducted in 2006-2008, examines the ways in which various groups involved with the marine resources of Seward, Alaska construct attitudes towards the environment. Participant observation and semi-structured interviews are used to assess how commercial halibut fishers, tour boat operators, local residents and government officials understand the marine environment based on their previous experiences. This study also explores how ideologies relate to the current practices of each group. Two theories orient the analyses: The first, cultural modeling provided a theoretical and methodological framework for pursuing a more comprehensive analysis of resource management. The second, Theory of Reasoned Action (Ajzen and Fishbein 1980), guided the analysis of the ways in which each participant’s ideology towards the marine environment relates to their practice. Aside from contributing to a better understanding of a coastal community’s ideologies and practices, this dissertation sought to better understand the role of ecological ideologies and behaviors in fisheries management. The research illustrates certain domains where ideologies and practices concerning Pacific halibut and the marine environment differ among commercial fishers, government, and management officials, tour boat operators and residents of Seward, AK. These differences offer insights into how future collaborative efforts between government officials, managers and local marine resource users might better incorporate local ideology into management, and provide ecological information to local marine resource users in culturally appropriate ways.

Three Essays on Economic Development in the Natural Resources Sector

This thesis examines two ongoing development projects that received financial support from international development organizations, and an alternative mining tax proposed by the academia. Chapter 2 explores the impact of commoditization of coffee on its export price in Ethiopia. The first part of the chapter traces how the Ethiopian’s current coffee trade system and commoditization come to be. Using regression analysis, the second part tests and confirms the hypothesis that commoditization has led to a reduction in coffee export price. Chapter 3 conducts a cost-benefit analysis on a controversial, liquefied natural gas export project in Peru that sought to export one-third of the country’s proven natural gas reserves. While the country can receive royalty and corporate income tax in the short and medium term, these benefits are dwarfed by the future costs of paying for alternative energy after gas depletion. The conclusion is robust for a variety of future energy-price and energy-demand scenarios. Chapter 4 quantifies through simulation the economic distortions of two common mining taxes, the royalty and ad-valorem tax, vis-à-vis the resource rent tax. The latter is put forward as a better mining tax instrument on account of its non-distortionary nature. The rent tax, however, necessitates additional administrative burdens and induces tax-avoidance behavior, both leading to a net loss of tax revenue. By quantifying the distortions of royalty and the ad-valorem tax, one can establish the maximum loss that can be incurred by the rent tax. Simulation results indicate that the distortion of the ad-valorem tax is quite modest. If implemented, the rent tax is likely to result in a greater loss. While the subject matters may appear diverse, they are united by one theme. These initiatives were endorsed and supported by authorities and development agencies in the aim of furthering economic development and efficiency, but they are unlikely to fulfill the goal. Lessons for international development can be learnt from successful stories as well as from unsuccessful ones.

Resources Grabbing and Human Rights: Building a Triangular Relationship Between States, Indigenous Peoples and Corporations

This is a pre-copyedited, author-produced PDF of a chapter accepted for publication in Angelica Bonfanti, Francesca Romanin Jacur, Francesco Seatzu (eds), Natural Resources Grabbing: Natural Resources Grabbing: An International Law Perspective, (Brill, 2016). The version of record is available at: http://www.brill.com/products/book/natural-resources-grabbing

Report on the Iowa Department of Natural Resources for the year ended June 30, 2015

Report on the Iowa Department of Natural Resources for the year ended June 30, 2015

Maryland Farm Internships and Labor Laws

Many farms across Maryland use interns to lighten the overall farm workload and help young people gain practical farming knowledge. Although interns can be a welcome addition to a farm’s workforce, farm employers need to be aware of how to properly compensate interns and the legal consequences of adding them to the payroll.

Impacts of fishery activities on lake shore environment and options for sustainable management

Over the years, degradation of the lakeshore resources has been going on due to human induced activities. Human activities notably house construction, fish smoking, boat construction and cooking at the landings impact the tree and forest cover along the lakeshore and Islands. The survey was conducted in ten districts surrounding Lake Victoria and the landings sampled were selected with the help of the District Fisheries Officers. Data was obtained from selected fishermen and Key informants at these landing sites. The study examined the extent of knowledge on importance, utilization, threats and conservation of trees/forests at the landings. Results showed that the fishers (98%) were aware of the benefits derived from the trees/forests. According to the respondents, the most commonly used tree species for boat construction were Mvule (40%), Mkibu (20%), Musizi (17%) and Mpewere (11 %). This was mainly because these trees were durable. For house construction, Nsambya (25%), Musizi (24%) and other materials (12%) were the most commonly used. For other activities like fish smoking and cooking at the landing, the Fisherfolk used any type of tree species readily available at the landings. As regards the status of the trees at the landings, most of the respondents (72%) J agreed that due to some fishery related activities some tree species had reduced more than others in the vicinity of most landings. Most respondents said that the, most reduced tree species around the landings were Mvule (36%) and Musizi (22%). Among the fishery related activities that had a significant impact on the trees/forests, construction of houses (44%) and boats (22%) emerged uppermost. Other activities such as fish smoking (14%) and cooking (12%) had the least impact on trees/forests. Generally, there was extensive reduction of trees at the landings. Therefore there was need to regulate cutting of trees and to have specific programmes targeting afforestation at and around fish landings.

Impact of dead and sunken water hyacinth on biotic communities, the aquatic environment and socioeconomic activities

The mobile water hyacinth, which was produced in growth zones, especially Murchison bay, was mainly exported to three sheltered storage bays (Thruston, Hannington and Waiya). Between 1996 and May 1998, the mobile form of water hyacinth occupied about 800 ha in Thruston bay, 750 ha in Hannington bay and 140 ha in Waiya bay). Biological control weevils and other factors, including localised nutrient depletion, weakened the weed that was confined to the bays and it sunk around October 1998. The settling to the bottom of such huge quantities of organic matter its subsequent decomposition and the debris from this mass was likely to have environmental impacts on biotic communities (e.g. fish and invertebrate), physico-chemical conditions (water quality), and on socio-economic activities (e.g. at fish landings, water abstraction, and hydro-power generation points). Sunken water hyacinth debris could also affect nutrient levels in the water column and lead to reduction in the content of dissolved oxygen. The changes in nutrient dynamics and oxygen levels could affect algal productivity, invertebrate composition and fish communities. Socio-economic impacts of dead sunken weed were expected from debris deposited along the shoreline especially at fish landings, water abstraction and hydropower generation points. Therefore, environmental impact assessment studies were carried out between 1998 and 2002 in selected representative zones of Lake Victoria to identify the effects of the sunken water hyacinth biomass.

Aquatic weeds, their impacts on fisheries and environment, and their control

Weeds are plants growing in environments where they are undesirable. Aquatic weeds in fresh waters are nuisance or noxious plants growing in association with water in lakes, impoundment, rivers, canals, wetlands, etc. Some waterweeds cause very big financial loss through the socio economic, environmental and ecological impacts they inflict; and through the effort and expense required for their control. Other waterweeds are simply nuisance plants that cause minimal impacts. This paper is intended to introduce aquatic weeds outlining their characteristics, the main socio-economic and environmental impacts associated with them, and the control strategies often applied for their management.

Federal Crop Insurance Program Expands in 2016 and 2017 to Cover More Organic Crops

Organic agriculture represents one of the fastest growing segments of U.S. agriculture (USDA-RMA). With this in mind, the USDA’s Risk Management Agency (RMA) continues to expand crop insurance options for organic growers. In 2016 and 2017, organic producers in Maryland will see additional crops with organic crop insurance options. Increasing crop insurance options will allow this segment of producers new opportunities to manage their risks.

Crop Insurance For Maryland Field Crops And Livestock

Multi-peril crop insurance is a valuable risk management tool which allows you to insure against losses on your farm due to adverse weather conditions, price fluctuations, and unavoidable pests and diseases. It shifts unavoidable production risks to an insurance company for the payment of a fixed amount of premium per acre. This publication assists readers in understanding the basics of the federal crop insurance program.

Agricultural Water Law in Maryland: The Water Appropriation Application Process and Use in a Time of Drought

To conserve and protect the State's water resources the State of Maryland controls the appropriation or use of its surface waters and groundwater. State law requires all agricultural operations to comply with the water appropriation permitting process, including traditional forms of agriculture, livestock and poultry operations, nursery operations and aquaculture.

Soil pH and Nutrient Availability

Fertilizers, whether commercial or from manure sources, will not be effective if soil pH isn’t managed. Besides nutrient availability, soil biology and pesticide efficacy can also be pH dependent. Unfortunately, due to varying soil types and crop needs, there isn’t a single pH that is ideal. While most crops are assigned a suitable pH range (6.0 to 6.5), producers can maximize yields by better understanding soil properties and crop response.