Fair value versus historic cost-valuation for biological assets: Implications for the quality of financial information

[spa] Este trabajo realiza un estudio empírico sobre los efectos, que se señalan en las discusiones teóricas, de la utilización del valor razonable (VR) frente al coste histórico (CH), utilizando dos muestras de explotaciones agrícolas, una de las cuales valora sus activos biológicos a CH y la otra a VR. No se encontraron diferencias significativas en los beneficios e ingresos entre ambas muestras, ni siquiera en sus volatilidades. Tampoco se encontraron diferencias significativas en rentabilidad, manipulación contable, ni en el poder de ambos criterios de valoración para predecir los flujos de tesorería. Por el contrario, la mayor parte de los tests realizados revelan un mayor poder de los beneficios calculados bajo el VR para la predicción de los beneficios futuros, respecto de cuando son calculados bajo el CH. El estudio proporciona también evidencia empírica de prácticas contables defectuosas de CH en el sector agrícola, concluyendo que el VR puede representar un criterio de valoración interesante para un sector, como el agrícola, caracterizado por el predominio de pequeñas explotaciones familiares.

Fair value versus historic cost-valuation for biological assets: Implications for the quality of financial information

[spa] Este trabajo realiza un estudio empírico sobre los efectos, que se señalan en las discusiones teóricas, de la utilización del valor razonable (VR) frente al coste histórico (CH), utilizando dos muestras de explotaciones agrícolas, una de las cuales valora sus activos biológicos a CH y la otra a VR. No se encontraron diferencias significativas en los beneficios e ingresos entre ambas muestras, ni siquiera en sus volatilidades. Tampoco se encontraron diferencias significativas en rentabilidad, manipulación contable, ni en el poder de ambos criterios de valoración para predecir los flujos de tesorería. Por el contrario, la mayor parte de los tests realizados revelan un mayor poder de los beneficios calculados bajo el VR para la predicción de los beneficios futuros, respecto de cuando son calculados bajo el CH. El estudio proporciona también evidencia empírica de prácticas contables defectuosas de CH en el sector agrícola, concluyendo que el VR puede representar un criterio de valoración interesante para un sector, como el agrícola, caracterizado por el predominio de pequeñas explotaciones familiares.

Fair value versus historical cost-based valuation for biological assets: Predictability of financial information

There is an intense debate on the convenience of moving from historical cost (HC) toward the fair value (FV) principle. The debate and academic research is usually concerned with financial instruments, but the IAS 41 requirement of fair valuation for biological assets brings it into the agricultural domain. This paper performs an empirical study with a sample of Spanish farms valuing biological assets at HC and a sample applying FV, finding no significant differences between both valuation methods to assess future cash flows. However, most tests reveal more predictive power of future earnings under fair valuation of biological assets, which is not explained by differences in volatility of earnings and profitability. The study also evidences the existence of flawed HC accounting practices for biological assets in agriculture, which suggests scarce information content of this valuation method in the predominant small business units existing in the agricultural sector in advanced Western countries

Promoter DNA Hypermethylation and Gene Repression in Undifferentiated Arabidopsis Cells

Maintaining and acquiring the pluripotent cell state in plants is critical to tissue regeneration and vegetative multiplication. Histone-based epigenetic mechanisms are important for regulating this undifferentiated state. Here we report the use of genetic and pharmacological experimental approaches to show that Arabidopsis cell suspensions and calluses specifically repress some genes as a result of promoter DNA hypermethylation. We found that promoters of the MAPK12, GSTU10 and BXL1 genes become hypermethylated in callus cells and that hypermethylation also affects the TTG1, GSTF5, SUVH8, fimbrin and CCD7 genes in cell suspensions. Promoter hypermethylation in undifferentiated cells was associated with histone hypoacetylation and primarily occurred at CpG sites. Accordingly, we found that the process specifically depends on MET1 and DRM2 methyltransferases, as demonstrated with DNA methyltransferase mutants. Our results suggest that promoter DNA methylation may be another important epigenetic mechanism for the establishment and/or maintenance of the undifferentiated state in plant cells.

Fiscal policy and interest rates: the role of financial and economic integration

It is commonly believed that a fiscal expansion raises interest rates. However, these crowding out effects of deficits have been found to be small or non-existent. One explanation is that financial integration offsets interest rate differentials on globalised bond markets. This paper measures the degree of integration of government bond markets, using spatial modelling techniques to take this spillover on financial markets into account. Our main finding is that the crowding out effect on domestic interest rates is significant, but is reduced by spillover across borders. This spillover is important in major crises or in periods of coordinated policy actions. This result is generally robust to various measures of cross-country linkages. We find spillover to be much stronger among EU countries.

Financial stress transmission in EMU sovereign bond market volatility: a connectedness analysis

This paper measures the connectedness in EMU sovereign market volatility between April 1999 and January 2014, in order to monitor stress transmission and to identify episodes of intensive spillovers from one country to the others. To this end, we first perform a static and dynamic analysis to measure the total volatility connectedness in the entire period (the system-wide approach) using a framework recently proposed by Diebold and Yılmaz (2014). Second, we make use of a dynamic analysis to evaluate the net directional connectedness for each country and apply panel model techniques to investigate its determinants. Finally, to gain further insights, we examine the timevarying behaviour of net pair-wise directional connectedness at different stages of the recent sovereign debt crisis.

Creating and implementing a financial management process to an international company

The objectives of this thesis areto identify the best elements from Information Technology Infrastructure Library financial management for an international company. The elements need to be customized to fit existing elements and the thesis needs to provide implementation proposal. The new IT financial management needs to improve cost visibility and bring benefits to the company. In order to find the best elements for IT financial management, there needs to be a research to discover the companys business needs. The ITIL library is used to find answers and solutions to the companys issues in IT financial management. Other IT frameworks can and will be used as well, if they are able to work with ITIL model. ITIL consists from budgeting, accounting and charging in IT financial management, which all needs to be investigated. In addition more ITIL elements such as contract management and supplier management can be used, in order to make IT financial management work better.

Model for interevent times with long tails and multifractality in human communications: An application to financial trading

Social, technological, and economic time series are divided by events which are usually assumed to be random, albeit with some hierarchical structure. It is well known that the interevent statistics observed in these contexts differs from the Poissonian profile by being long-tailed distributed with resting and active periods interwoven. Understanding mechanisms generating consistent statistics has therefore become a central issue. The approach we present is taken from the continuous-time random-walk formalism and represents an analytical alternative to models of nontrivial priority that have been recently proposed. Our analysis also goes one step further by looking at the multifractal structure of the interevent times of human decisions. We here analyze the intertransaction time intervals of several financial markets. We observe that empirical data describe a subtle multifractal behavior. Our model explains this structure by taking the pausing-time density in the form of a superstatistics where the integral kernel quantifies the heterogeneous nature of the executed tasks. A stretched exponential kernel provides a multifractal profile valid for a certain limited range. A suggested heuristic analytical profile is capable of covering a broader region.

Capital Structure of Finnish SMEs and Financial Constraints

This thesis studies capital structure of Finnish small and medium sized enterprises. The specific object of the study is to test whether financial constraints have an effect on capital structure. In addition influences of several other factors were studied. Capital structure determinants are formulated based on three capital structure theories. The tradeoff theory and the agency theory concentrate on the search of optimal capital structure. The pecking order theory concerns favouring on financing source over another. The data of this study consists of financial statement data and results of corporate questionnaire. Regression analysis was used to find out the effects of several determinants. Regression models were formed based on the presented theories. Short and long term debt ratios were considered separately. The metrics of financially constrained firms was included in all models. It was found that financial constrains have a negative and significant effect to short term debt ratios. The effect was negative also to long term debt ratio but not statistically significant. Other considerable factors that influenced debt ratios were fixed assets, age, profitability, single owner and sufficiency of internal financing.

Competitors' Financial Performance Monitoring Model

The objective of the thesis was to develop a competitors’ financial performance monitoring model for management reporting. The research consisted of the selections of the comparison group and the performance meters as well as the actual creation of the model. A brief analysis of the current situation was also made. The aim of the results was to improve the financial reporting quality in the case organization by adding external business environment observation to the management reports. The comparison group for the case company was selected to include five companies that were all involved in power equipment engineering and project type business. The most limiting factor related to the comparison group selection was the availability of quarterly financial reporting. The most suitable performance meters were defined to be the developments of revenue, order backlog and EBITDA. These meters should be monitored systematically on quarterly basis and reported to the company management in a brief and informative way. The monitoring model was based on spreadsheet construction with key characteristics being usability, flexibility and simplicity. The model acts as a centered storage for financial competitor information as well as a reporting tool. The current market situation is strongly affected by the economic boom in the recent years and future challenges can be clearly seen in declining order backlogs. The case company has succeeded well related to its comparison group during the observation period since its business volume and profitability have developed in the best way.

Cytoplasmic accumulation of NCoR in malignant melanoma: Consequences of altered gene repression and prognostic significance

Invasive malignant melanoma (MM) is an aggressive tumor with no curative therapy available in advanced stages. Nuclear corepressor (NCoR) is an essential regulator of gene transcription, and its function has been found deregulated in different types of cancer. In colorectal cancer cells, loss of nuclear NCoR is induced by Inhibitor of kappa B kinase (IKK) through the phosphorylation of specific serine residues. We here investigate whether NCoR function impacts in MM, which might have important diagnostic and prognostic significance. By IHC, we here determined the subcellular distribution of NCoR in a cohort of 63 primary invasive MM samples, and analyzed its possible correlation with specific clinical parameters. We therefore used a microarray-based strategy to determine global gene expression differences in samples with similar tumor stage, which differ in the presence of cytoplasmic or nuclear NCoR. We found that loss of nuclear NCoR results in upregulation of a specific cancer-related genetic signature, and is significantly associated with MM progression. Inhibition of IKK activity in melanoma cells reverts NCoR nuclear distribution and specific NCoR-regulated gene transcription. Analysis of public database demonstrated that inactivating NCoR mutations are highly prevalent in MM, showing features of driver oncogene.

Financial integration and TARGET2-Securities – A stakeholder approach

The purpose of this study was to analyze how different stakeholders, such as the European Central Bank, the European Commission, the European Central Securities Depositories Association, the Bank of International Settlements and the International Monetary Fund, have influenced the European financial integration in the area of securities clearing and settlement since the introduction of the single currency. The results show that the contribution differs from stakeholder to another and can take the form of standards and recommendations, legislation, research and publications, risk analysis etc. The Eurosystem has been particularly active in this area by proving and planning central bank services, such as TARGET2, CCMB2 and T2S. Along the way the development has and continues to face challenges that need to be solved by European authorities. Coordination is a key factor for the future as we have seen during the recent financial turmoil.

Financial and Environmental Impacts of a Dry Port to Facilitate Competitiveness of Two Major Transit Seaports of Finland

Environmental problems and issues have received more and more attention during the last decades. Reasons for this are different increased external costs such as congestion, CO2 emission, noise and accident costs. Transportation sector is the only sector with increasing external costs. The EU will increase its attention in decreasing the external costs of transport. Aim of this research was to find out if a dry port solution could decrease costs of transport, especially external costs. Dry port concept is an intermodal transport system, where inland transport between port and dry port is performed by rail transport instead of traditional road transport. In addition, dry ports offer similar services as ports. Research is conducted by performing a literature review about dry port concept and costs of transport, especially external costs of transport. Financial and environmental impacts of the dry port concept are studied by comparing costs of road and rail transport by cost accounting and with a simulation model. Location of dry port is researched with gravitational models. Results of the literature review are that rail transport is environmentally friendlier mode of transport than road transport. Cost model and simulation model show that if only costs of freight movement are considered, rail transport is more inexpensive transport mode than road transport in terms of internal and external costs. Because of that dry port concept could decrease costs of transport, especially external costs. Results of gravitational models are that city of Kouvola is in a good position to be a dry port. Russian transit traffic through Finland improves location of Kouvola to be a dry port.