Reversal of impairment losses, firm performance and reporting incentives: Evidence from Malaysia

Malaysian Financial Reporting Standard (FRS) No. 136, Impairment of Assets, was issued in 2005. The standard requires public listed companies to report their non-current assets at no more than their recoverable amount. When the value of impaired assets is recovered, or partly recovered, FRS 136 requires the impairment charges to be reversed to its new recoverable amount. This study tests whether the reversal of impairment losses by Malaysian firms is more closely associated with economic reasons or reporting incentives. The sample of this study consists of 182 public companies listed on Bursa Malaysia (formerly known as the Kuala Lumpur Stock Exchange) that reported reversals of their impairment charges during the period 2006-2009. These firms are matched with firms which do not reverse impairment on the basis of industrial classification and size. In the year of reversal, this study finds that the reversal firms are more profitable (before reversals) than their matched firms. On average, the Malaysian stock market values the reversals of impairment losses positively. These results suggest that the reversals generally reflect increases in the value of the previously impaired assets. After partitioning firms that are likely to manage earnings and those that are not, this study finds that there are some Malaysian firms which reverse the impairment charges to manage earnings. Their reversals are not value-relevant, and are negatively associated with future firm performance. On the other hand, the reversals of firms which are deemed not to be earnings managers are positively associated with both future firm performance and current stock price performance, and this is the dominant motivation for the reversal of impairment charges in Malaysia. In further analysis, this study provides evidence that the opportunistic reversals are also associated with other earnings management manifestations, namely abnormal working capital accruals and the motivation to avoid earnings declines. In general, the findings suggest that the fair value measurement in impairment standard provides useful information to the users of financial statements.

Contrasting the efficiency of radiation belt losses caused by ducted and nonducted whistler-mode waves from ground-based transmitters

It has long been recognized that whistler-mode waves can be trapped in plasmaspheric whistler ducts which guide the waves. For nonguided cases these waves are said to be "nonducted", which is dominant for L < 1.6. Wave-particle interactions are affected by the wave being ducted or nonducted. In the field-aligned ducted case, first-order cyclotron resonance is dominant, whereas nonducted interactions open up a much wider range of energies through equatorial and off-equatorial resonance. There is conflicting information as to whether the most significant particle loss processes are driven by ducted or nonducted waves. In this study we use loss cone observations from the DEMETER and POES low-altitude satellites to focus on electron losses driven by powerful VLF communications transmitters. Both satellites confirm that there are well-defined enhancements in the flux of electrons in the drift loss cone due to ducted transmissions from the powerful transmitter with call sign NWC. Typically, ∼80% of DEMETER nighttime orbits to the east of NWC show electron flux enhancements in the drift loss cone, spanning a L range consistent with first-order cyclotron theory, and inconsistent with nonducted resonances. In contrast, ∼1% or less of nonducted transmissions originate from NPM-generated electron flux enhancements. While the waves originating from these two transmitters have been predicted to lead to similar levels of pitch angle scattering, we find that the enhancements from NPM are at least 50 times smaller than those from NWC. This suggests that lower-latitude, nonducted VLF waves are much less effective in driving radiation belt pitch angle scattering. Copyright 2010 by the American Geophysical Union.

Efficient computation algorithm for calculating load contributions to line flows and losses

In a deregulated power system, it is usually required to determine the shares of each load and generation in line flows, to permit fair allocation of transmission costs between the interested parties. The paper presents a new method of determining the contributions of each load to line flows and losses. The method is based on power-flow topology and has the advantage of being the least computationally demanding of similar methods.

A method for determining generators’ shares in loads, line flows and losses

This paper presents a new method for calculating the individual generators’ shares in line flows, line losses and loads. The method is described and illustrated on active power flows, but it can be applied in the same way to reactive power flows. Starting from a power flow solution, the line flow matrix is formed. This matrix is used for identifying node types, tracing the power flow from generators downstream to loads, and to determine generators’ participation factors to lines and loads. Neither exhaustive search nor matrix inversion is required. Hence, the method is claimed to be the least computationally demanding amongst all of the similar methods.

Correction of dielectric losses in practical leaky-wave antenna designs

In this paper, the leaky-mode theory is applied to take into account for the dielectric losses in millimetre waveband inhomogeneous leaky-wave antennas. A practical dielectric-filled cosine-tapered periodic leaky-wave antenna working in the 45GHz band is studied, showing how the desired sidelobes level and directivity are spoilt due to the effect of the losses. An iterative procedure is used to correct the negative effects of the losses in the radiation patterns of the leaky-wave structure. It is also shown the practical limits of the proposed correction approach. The leaky-mode theory is applied for the first time to compensate the losses in a practical leaky-wave antenna in hybrid waveguide printed circuit technology. This leaky-mode theory is validated with full-wave three-dimensional finite element method simulations of the designed antenna.

Determining generators' contribution to loads and line flows & losses considering loop flows

This paper presents a new method for calculating the individual generators' shares in line flows, line losses and loads. The method is described and illustrated on active power flows, but it can be applied in the same way to reactive power flows.