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Author: Vera Palea Publisher: ISBN: Category : Languages : en Pages : 44
Book Description
In this research, the effects of accounting standardization in Europe on the capital market has been investigated by focusing on the bank industry. In particular, since the main purpose of the European Regulation 1606/2002 is that of fostering an efficient and cost-effective functioning of the capital market, this paper directly relates accounting standardization to the cost of equity. The adoption of the same accounting standard set within the Community was expected to improve comparability and, in such a way, to reduce firms' differences in the cost of equity. Contrary to expectations, empirical evidence shows that the adoption of the IAS has led to an increase, instead of a reduction, in the cost of equity. The explanation that can be advanced for such a result is that while, on the one hand, accounting standardization has eliminated measurement errors in assessing firms' risk, reducing differences in their cost of equity, on the other hand, the IAS/IFRS adoption has improved firms' level of disclosure, allowing investors to better differentiate among firms' risk, hence increasing cost of capital variability.
Author: Vera Palea Publisher: ISBN: Category : Languages : en Pages : 44
Book Description
In this research, the effects of accounting standardization in Europe on the capital market has been investigated by focusing on the bank industry. In particular, since the main purpose of the European Regulation 1606/2002 is that of fostering an efficient and cost-effective functioning of the capital market, this paper directly relates accounting standardization to the cost of equity. The adoption of the same accounting standard set within the Community was expected to improve comparability and, in such a way, to reduce firms' differences in the cost of equity. Contrary to expectations, empirical evidence shows that the adoption of the IAS has led to an increase, instead of a reduction, in the cost of equity. The explanation that can be advanced for such a result is that while, on the one hand, accounting standardization has eliminated measurement errors in assessing firms' risk, reducing differences in their cost of equity, on the other hand, the IAS/IFRS adoption has improved firms' level of disclosure, allowing investors to better differentiate among firms' risk, hence increasing cost of capital variability.
Author: Vera Palea Publisher: ISBN: Category : Languages : en Pages :
Book Description
In this research, the effects of accounting standardization in Europe on the capital market has been investigated by focusing on the bank industry. In particular, since the main purpose of the European Regulation 1606/2002 is that of fostering an efficient and cost-effective functioning of the capital market, this paper directly relates accounting standardization to the cost of equity. The adoption of the same accounting standard set within the Community was expected to improve comparability and, in such a way, to reduce firms' differences in the cost of equity. Contrary to expectations, empirical evidence shows that the adoption of the IAS has led to an increase, instead of a reduction, in the cost of equity. The explanation that can be advanced for such a result is that while, on the one hand, accounting standardization has eliminated measurement errors in assessing firms' risk, reducing differences in their cost of equity, on the other hand, the IAS/IFRS adoption has improved firms' level of disclosure, allowing investors to better differentiate among firms' risk, hence increasing cost of capital variability.
Author: Simon Falcke Publisher: GRIN Verlag ISBN: 3346203107 Category : Business & Economics Languages : en Pages : 36
Book Description
Seminar paper from the year 2019 in the subject Business economics - Investment and Finance, grade: 1,0, Otto Beisheim School of Management Vallendar, language: English, abstract: Starting in 2005, the portion of foreign shareholders in the Dax has risen from 45% to 58% in the last decade. In the same year, the regulation of the European Union from 2002 came into effect which required all listed firms in the European Union to report their consolidated accounts in accordance with the International Financial Reporting Standard (IFRS) from 2005 on instead of each countries’ generally accepted accounting standards (GAAP). This is just one example where the volume of investments increased concurrently with the adoption of IFRS. Therefore, the question arises if the mandatory adoption of IFRS in the EU in 2005 or in other cases significantly affected and continues to affect investment decisions among adopters or third parties. In order to better account for differences between different types of investors and investees, we differentiate between retail investors, institutional investors and corporate finance activities. Moreover, we focus on the consequence of IFRS adoption on equity investment decisions as most research appears to focus on the equity instead of the credit market. Additionally, Lourenco & Branco point out that most research which finds no significant effects of IFRS adoption on investment decisions appears to focus on voluntary adoption before 2005. Thus, this paper mainly focuses on mandatory IFRS adoption. In this context, research suggests that mandatory IFRS adopters experience significant capital markets benefits as well as enhanced foreign institutional ownership and enhanced M&A activity. Ultimately, we observe four overarching drivers behind the aforementioned observations that impact investment decisions across different types of investors and investees.
Author: Didier Bensadon Publisher: Springer ISBN: 3319282255 Category : Business & Economics Languages : en Pages : 477
Book Description
This book, dedicated to Prof. Jacques Richard, is about the economic, political, social and even environmental consequences of setting accounting standards, with emphasis on those that are alleged to be precipitated by the adoption and implementation of IFRS. The authors offer their reasoned critiques of the effectiveness of IFRS in promoting genuine global comparability of financial reporting. The editors of this collection have invited authors from 17 countries, so that a great variety of accounting, auditing and regulatory cultures, and educational perspectives, is amply on display in their essays.
Author: Daniel Gros Publisher: John Wiley & Sons ISBN: 0470842768 Category : Business & Economics Languages : en Pages : 216
Book Description
The authors predict that the impact will be far-reaching, leading to a more liquid, mature and efficient capital market. The structure of capital markets in Europe and the behaviour of actors in these markets will be fundamentally affected, leading to a more integrated market. For monetary union to achieve its real objective, policy makers will need to address a wide variety of outstanding issues, in particular the taxation of savings income, accounting standards, capital market regulation and financial supervision. The start of monetary union on 1 January 1999 launched a process of radical change in the structure of capital markets in Europe. Whereas previously, Europe had been fragmented into many diverse national markets, a single Euro capital market is now emerging. This book focuses on the long-term impact that the introduction of the euro will have on European capital markets and spells out implications for the financial sector and the wider economy. It discusses what further steps need to be taken to achieve a fully integrated market. In particular, the book examines: * The institutional and regulatory framework for European capital markets * The structure of European capital markets on the eve of EMU * The regional differences and the contrasts with the US capital market * The central role played by banks in European capital markets and the likelihood that a more market-based system may emerge * The implications of EMU for organised securities markets * The consequences for governance and policy, and more in particular for the taxation of savings income, securities market regulation and financial supervision
Author: Roberto Di Pietra Publisher: Springer Science & Business Media ISBN: 1461480973 Category : Business & Economics Languages : en Pages : 424
Book Description
Since 1998, the world’s leading experts on accounting and regulation have convened in a series of workshops to explore and analyze emerging issues in the field. They have covered a wide array of topics, including corporate governance, auditing, financial disclosure, international standards boards, and the dynamics of markets and institutions. Most recently, they have focused on the role that accounting practices and policies may have played in the global financial crisis of 2008. In this volume, the editors showcase contributions from the workshops that represent the full spectrum of issues and perspectives relating to accounting and regulation. Each paper incorporates the most current examples and references to reflect the latest insights, with an emphasis on exploring future implications for theory and research, practice, and policymaking.
Author: Vera Palea Publisher: ISBN: Category : Languages : en Pages : 48
Book Description
The effect of disclosure level on the cost of equity is a matter of considerable interest and importance to the financial reporting community. In this research, the effects of the IAS/IFRS adoption in Europe on the cost of equity capital relative to the bank industry have been examined. Previous research has shown that the adoption of the IAS/IFRS reduces information asymmetry between investors and firms. Economic theory claims that a commitment to increased level of disclosure reduces the cost of capital component that arises from information asymmetries. This study shows empirically that the increase in the level of disclosure provided by the adoption of the IAS/IFRS in the European Union by Regulation 1606/2002 has led effectively to a lower cost of capital. From a practical point of view, these findings provide evidence that the Regulator's purpose of fostering a cost-efficient functioning of the capital market for firms could be considered as accomplished. Furthermore, they point out that firms which implemented the IAS/IFRS have gained a comparative advantage on the equity market over firms still adopting accounting standards based on the IV and VII European Directives.
Author: Eva Kaili Publisher: Springer ISBN: 3030028313 Category : Business & Economics Languages : en Pages : 204
Book Description
This book looks at the 23 million registered Small and Medium Enterprises (SMEs) that make up 98 per cent of the EU economy. Addressing the high end of SMEs in terms of new models for SME funding and financial reporting, this merged way of looking at SMEs reveals a ‘myopic’ thinking in terms of net present value and (future) cash flows generating short-termism and low risk appetite for business. This is not an accounting issue, but rather a preference toward certain financial tools. A segment of SMEs, the ones that seek new ways of funding possibilities, as well as modern technologies (MTFs listing, blockchain, ICOs, etc.) do require, even without knowing, IFRS for SMEs. This book reveals how market conditions impact the financial performance and sustainability of SMEs and also generate innovative policy interventions and financing strategies for SME integrity and efficiency. The authors frame their arguments in the context of the Capital Markets Union, looking at the Innovation Triangle, SME growth ecosystem and business models. They conclude by advocating for closing the circle of financing and financial reporting for SMEs, while considering if new financial models of financing and financial reporting are good for all the SMEs or only for some. The economy is being shaped by new models of financing and financial reporting. Read this practitioners’ view to understand the current changes and challenges.
Author: Carien van Mourik Publisher: Routledge ISBN: 1136243496 Category : Business & Economics Languages : en Pages : 495
Book Description
Financial accounting, reporting and regulation is a vast subject area of huge global importance, with interest rising significantly in the light of the ongoing global financial crisis. The authors begin with a broad overview of the subject of accounting, setting the stage for a discussion on the theoretical and practical issues and debates regarding financial reporting, which are expanded on in the second part of the book. This includes how to define the reporting entity, recognition and measurement of the elements of financial statements, fair values in financial reporting and the costs and benefits of disclosure. The third part assesses the interest, need and theories behind the accounting, reporting and regulation industry, while parts four and five look at the institutional, social and economic aspects; with issues such as accounting for environmental management and, accounting regulation and financial reporting in Islamic countries, both issues of ever increasing importance. This authoritative Companion presents a broad overview of the state of these disciplines today, and will provide a comprehensive reference source for students and academics involved in accounting, regulation and reporting.
Author: Vera Palea
Author: Vera Palea
Author: Vera Palea
Author: Vera Palea
Author: Simon Falcke
Author: Didier Bensadon
Author: Daniel Gros
Author: Roberto Di Pietra
Author: Vera Palea
Author: Eva Kaili
Author: Carien van Mourik