Alberto Quagli

Fair Value or Cost Model? Drivers of Choice for IAS 40 in the Real Estate Industry

The IFRS mandatory adoption in European countries is an excellent context from which to assess the validity of accounting choice theory, which postulates that information asymmetry, contractual efficiency (agency costs) and managerial opportunism reasons could drive the choice. With this aim, we test the impact of these factors to explain the adoption of fair value for investment properties (IAS 40) in the real estate industry, taking into account the ‘revaluation’ option offered by IFRS1 and using historical cost without revaluations as a baseline category for comparison purposes. We select a sample of European real estate companies from Finland, France, Germany, Greece, Italy, Spain and Sweden, all first-time adopters of the IFRS. Using a multinomial logistic model, we show that information asymmetry, contractual efficiency and managerial opportunism could account for the fair value choice. Particularly, the most significant findings are that size as a proxy of political costs reduces the likelihood of using fair value while market-to-book ratio is negatively associated with the fair value choice. On the other hand, leverage, another typical proxy of contracting costs, seems not to influence the choice. This evidence confirms the current validity of traditional accounting choice theory even if it reveals, in such a context, the irrelevance of the usual relations between accounting choice and leverage.

Goodwill Accounting as a Missing Link between Financial and Management Accounting: Literature Review and Research Agenda

The main objective of this paper is to deal with the relationship between financial and management accounting concerning goodwill accounting. In this research I referred to the existing literature on goodwill accounting, impairment losses, and impairment testing, considering both the amortization and the impairment era in order to understand how interrelationships between financial and management accounting based on goodwill accounting were investigated theoretically. The results of the review still show a lack of dialogue in the accounting research. Even though the scant empirical evidence of operating practice within the companies demonstrate a natural linkage during the impairment era, internal and external reporting are still considered as two separate domains. This result, more logical in the amortization era, denotes by now a relevant gap in accounting research and it is time to pose some relevant research questions to open up an interdisciplinary (internal and external reporting) view. It is possible that the development of this new strand of research helps to advance our knowledge of business on many fronts. I refer to the advancement necessary to explain the mixed results of financial accounting studies such as the controversial value relevance of write-offs or the reason for opportunistic behavior in goodwill accounting, to interpret how financial accounting rules influence management accounting and, in the opposite sense, how management accounting represents a relevant factor in determining the financial reporting environment. A less myopic view, more open to a comparison between management and financial accounting, will also help standard setters , to understand if their rules require the disclosure of already adopted internal practices, if they favor company managerial growth, or if they add new and too sophisticated administrative tasks, too far from the current state of managerial thinking.

The IAS 39 October 2008 Amendment as Another Opportunity of Earnings Management: An Analysis of the European Banking Industry

In this paper, we investigate whether there is a relationship between earnings and capital management and the adoption of the October 2008 IAS 39 amendment using a sample of 71 publicly traded bank holding companies in the main European markets. We demonstrate the new reclassification possibilities and the consequent avoided losses are mainly used by companies with higher profitability and adopting in the past earnings management behavior. No significant relationship is found concerning capital management. This result gives further support to the studies of IFRS earning quality.

Stock Option Plans in Italy: Accounting Treatment, Financial Crisis, and Other Determinants

Many studies on employee stock option plans state that the favorable accounting treatment, even if not declared, has often been one of the main reasons for this form of compensation. According to that view, professionals and scholars forecasted that recognition required by IFRS 2 would imply a reduction in the granting of stock options as incentive means. On the other side, empirical evidence suggests that their widespread adoption cannot be explained by a single view, since many determinants play a role in their issue.In addition to the accounting change, stock options have recently been the target of growing criticism, especially when the financial crisis started to show its effects. That may have an impact not only on incentive effectiveness, but also on outrage costs limiting their use by listed firms.In such a perspective, the main purpose of the paper is to explore the impact of IFRS 2 and of the recent financial crisis on stock option granting. To achieve that objective, our analysis is focused on these external determinants, which will be tested together with other variables indicated by stock option literature (incentive alignment, financial constraints, and tax benefits).The analysis is carried out on the population of Italian listed companies on a ten-year time horizon (2000-2009). That setting is of particular interest to our research questions, since national GAAPs did not require any valuation in annual reports prior to 2005 and results from previous studies highlight a relevant role of external factors in explaining option granting.Empirical evidence suggests that: the mandatory transition to IFRS 2 did not have a significant effect on stock option granting, the issue of stock options is less likely to occur during the financial crisis, and firms with higher growth opportunities have a higher probability to grant stock options.

On the ‘Review of Structure and Effectiveness of the IFRS Foundation’: the EAA’s Financial Reporting Standards Committee’s View

Abstract In July 2015 the International Financial Reporting Standards (IFRS) Foundation launched its third five year review of its structure and effectiveness of the organisation. In a public call, the Trustees solicited stakeholders’ input on the relevance of IFRS Standards with respect to broadening the IFRS scope and to the impact of new technology, on the consistent application of IFRS and on the governance and funding of the International Accounting Standards Board and the IFRS Foundation. The European Accounting Association (EAA)’s Financial Reporting Standards Committee responded to this request for views by submitting a comment letter based on research-informed opinions. This article provides an overview of this Review of Structure and Effectiveness of the IFRS Foundation and the EAA’s opinions in response to this Review.

Who Influences Whom? An Exploratory Analysis of the Interrelations between Accounting Research and the IASB’s Standard Setting Activity

This study investigates the interrelations between accounting research and the IASB activity. Prior research shows a significant gap between academia, the standard setters and the accounting profession and underlines the failure of academic papers to contribute to accounting practice. Although we find some evidence of the intention of the IASB to fill the gap between accounting theory and practice, our analysis confirms the existence of a significant distance between financial accounting research and the IFRSs. The IASB ‘due process’ definitely influences the academic activity, but the accounting literature does not seem to represent a cornerstone for the IFRSs. Particularly, during the ‘due process’ steps that precede the P.I.R. phase, the IASB only quotes few papers. With the P.I.R. process, the number of research papers analysed by the IASB significantly increases, but it is not yet clear how this ex-post activity might really influence the IFRSs statements. Finally, we find that the traditional academic ranking systems are not a key factor driving the IASB selection of the articles to analyse during the P.I.R. process. This evidence sheds light on the risk of an unfruitful self-referentiality of the accounting academic literature and on the self-feeding nature of the academic world.

Just some order in financial reporting studies - the need for a taxonomy

The pressure for publishing, together with the global scope of financial reporting research, contribute to an impressive production of original studies by scholars, with no more geographical borders. Obviously this fact is positive for the progress of our discipline but if we get a keener look at the situation, we can identify many aspects where a more collaborative activity within the community of scholars could improve our work, giving more order to our field of study. In this sense, an urgent need is the development of a taxonomy of issues. A taxonomy refers to the unavoidable necessity to classify studies (articles, books, and other contributions), in order to easy search and retrieval. For a researcher a clear understanding of previous studies on the same issue is a due step of the work, but this activity is often based on heuristics, with a large potential to increase its efficiency. The actual research strategies are different. One of the most used is starting from some well-known papers, and, through the references included there, enlarging the knowledge of the extant literature. More systematic research in scientific paper data-bases is often the following step, but we need to choose the right keywords, in order not to miss relevant work. Obviously, with a detailed and generally accepted taxonomy applied on all the papers, this searching activity would be enormously empowered. In this sense, the impressive growth of scientific journals and other publications contributes to increasing the problem and the necessity for its solution. We don’t have any general accepted taxonomy in our field. The only ones available are too broad to work as useful tools for searching. For example, the European Accounting Association traditionally uses the following classification: Auditing, Accounting Education, Financial Analysis, Financial Reporting, Accounting and Governance, Accounting and Infor-

La produzione scientifica dei docenti italiani di Economia Aziendale. Un’analisi esplorativa nel triennio 2008-2010

The Italian university system is undergoing signicant changes, especially in terms of research evaluation. This evolution is even more significant for disciplines where the systematic analysis of research activity has only recently been introduced (such as Economia Aziendale). In the light of these considerations, the present paper aims at carrying out a first exploratory analysis of research published by Italian scholars of Economia Aziendale over the period 2008-2010. More specifically, the study focuses on research topics, methodology, international perspective and co-authorships with regard to both articles published in national and international journals (Journal Rating AIDEA), and books.

Gli economisti aziendali di fronte alla riforma Gelmini: prime considerazioni sull’accesso ai concorsi

emanerà un decreto contenente il dettaglio dei requisiti minimi previsti per l’accesso alle fasce di docenza, così come prospettato dall’art. 16, comma 3 lettere a) e h) della Legge 30 dicembre 2010, n. 240 (Legge Gelmini). Tale Decreto verrà emanato sulla base dei pareri richiesti a tre organismi ministeriali: il Consiglio Nazionale per l’Università (CUN), l’Agenzia Nazionale di Valutazione del sistema Universitario e della Ricerca (ANVUR) e il Comitato degli Esperti per la Politica della Ricerca (CEPR). Si poteva presumere che i tre organismi, slegati tra loro, si esprimessero in modo difforme. In effetti i tre pareri presentano differenze molto marcate e siamo curiosi e un po’ preoccupati circa le regoli finali che il Ministero intenderà stabilire. Riteniamo però opportuno comprendere le scelte operate dai tre organismi per valutare se, al di là delle specifiche differenze, emerge una tendenza comune, che potrebbe essere poi ripresa dal MIUR dandole forza di legge. Di questi tre pareri nel prosieguo si sintetizzano soltanto le specifiche disposizioni riferite all’area 13 (Scienze Economiche e Statistiche) o, ancora più precisamente, ai settori disciplinari componenti l’Accademia Italia di Economia Aziendale: SECS P07, (Economia Aziendale), P08 (Economia e gestione delle Imprese), P09 (Finanza Aziendale), P10 (Organizzazione Aziendale), P11 (Intermediari Finanziari). Tra questi la nostra maggiore attenzione va al settore P07 poiché costituisce il naturale alveo di interesse per i lettori di questa rivista. I tre pareri sono molto diversi: il CUN ha emanato il documento1 nel quale si stabilisce che un candidato possa partecipare ai concorsi per le diverse fasce accademiche (ricercatore, professore associato, professore ordinario) solo se possiede un certo numero di pubblicazioni scientifiche. Con riferimento all’a-