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The article contributes to the current discussion on whether and how to introduce corporate criminal responsibility to Germany. The article focuses on the interrelation between possible designs of a future corporate criminal law and the explanatory model of the "early" Niklas Luhmann (1964) on the existence and functionality of "useful illegality" (“brauchbare Illegalitat”) in organisations. The author presents the alternatives for penal legislature, discusses the original concept of Luhmann and debates his recent "rediscovery" and popularisation in the context of publicly debated corporate misconduct. The key question is whether, for reasons of efficiency, the law should allow companies leeway for useful deviant behaviour. As a rule, severe violations of state law are neither desirable nor useful. However, the “uselessness” depends on the “accounting period”. Rather, the author takes the view that law itself endeavours as far as possible to systematically implement socially beneficial behaviour in the binary code "right-wrong".

The aggregate trade in the market in a community must be accounted for per period of time. As such, the market consists of “flows.” Specifically, the flow of quantity traded is determined after interactions between the two flows of demand schedule and supply schedule; the former slopes downward and the latter upward for various reasons. In the period, a particular unit out of a stock quantity, fixed or not, can change hands zero to multiple times. No household would demand more of a “good” at a higher price. The household surely supplies more working hours at a higher wage rate. Then, the so-called “fixed supply” and “backward-bending curves” are counterfactual: they cannot be so in the given accounting period. Such a saying that the demand for liquidity slopes downward because the interest rate is the opportunity cost is also erroneous: demand must be defined in terms of benefit before being compared to its cost, or “price,” yet to be determined in the market. This essay aims to reevaluate, in hopes of correcting notable misconceptions in microeconomics, how demand and supply schedules should be defined in the product, the “production factor” and the asset markets.

Australia is experiencing cataclysmic weather events largely due to rising atmospheric temperatures caused by greenhouse gas emissions – climate change. A consequence of droughts, floods, fires, tempests and family disasters is the sale or loss of valuable stud stock. In normal trading circumstances these animals would not be sold as trading stock. However the sale of pastoral properties can be beyond the will of the owners for a raft of reasons. Presently the receipts from the sale of ALL animals sold as part of a primary production business are considered to be income according to ordinary concepts by the Australia Taxation Office (ATO) and taxed at ordinary income tax rates. This paper considers the value of animals included in the sale of rural properties in Australia. It argues that the provisions of the Income Tax Assessment Act 1997 (ITAA 1997) are being misinterpreted by tax administrators and tax professionals. Sections 70-10, 995 ITAA 1997 provide that livestock are trading stock – a revenue item. However s 385-100 refers to breeding stock – a capital item. Many practitioners may be interpreting ss 70-10, 995 as applying to ALL livestock. Considering the sale ALL animals traded on the sale of a pastoral lease or farm as revenue denies vendors of concessions permitted under the capital gains tax provisions. This paper considers the income and capital gains tax implications on the sale of animals in conjunction with the sale of pastoral and farming properties in Australia. The distinction between classifying expenditure by an enterprise to be on items of a capital or a revenue nature has long been argued. Generally, in accounting terms, expenditure is considered to be of a capital nature if the benefit of the purchased asset is applied to more than one accounting period.

The System of Environmental-Economic Accounting for Water (SEEA-W) consists of an agreed international framework for organizing hydrological and economic information in a coherent and consistent manner. The methodology yields to the SEEA-W physical tables focusing on the quantitative assessment of the stocks and their changes in a river basin during the accounting period. For that purpose, the information on the abstraction and water discharge is linked with the environment water stocks, which assesses how current levels of abstraction and discharge affect such water stocks. This study presents the methodology and results to fill out the SEEAW tables for asset accounts on the Spanish Duero basin. Duero is a transboundary river between Spain and Portugal where 80% of its basin area (78,860km(2)) runs into the Spanish territory. The Spanish part is divided in five zones and 13 management systems. The methodology applied the three models used by the Spanish Water Authorities for the planning and allocation of water resources in Spain: 'SIMPA' model (rainfall-runoff model), 'ASTER' model (hydro-meteorological model related to snow processes) and 'SIMGES' model (water management simulation model). The required information was collected with the support from the Duero River basin Authority and the Spanish Ministry of Agriculture. Special care was paid to issues such as: inter-annual variability, the selection of spatial and temporal scale, seasonality, disaggregation of human abstractions into use's type, and transboundary agreements. The results highlighted some drawbacks in the SEEAW methodology for the Duero basin. However, the developed balances are a valuable tool to support the decisions of the Spanish Duero basin Authority on the management and allocation of water in the basin and in the transboundary area with Portugal. Finally, the paper outlines some recommendations for future work.

Commercial insurance system acts like a memoryless system in a way that the premiums paid by the policyholders in one accounting period will be of no avail to them during subsequent periods. Here, we argue that if the insurance scheme is implemented as a not-for-profit trust fund (social insurance) instead of a for-profit limited liability company (commercial insurance) then it will effectively and less expensively hedge against unforeseen losses. If the profit of the insurance company is retained instead of being distributed to the stockholders and there is no agency commission then after a certain number of years, all upcoming claims can be addressed from the interest income of the accumulated profit and the policyholders do not need to pay any premium afterwards. Here, we algebraically calculate the time period required to achieve such a perpetual insurance system as the policyholders after a certain period of time, do no longer need to pay any premium in order to get coverage from losses. In the next step, we empirically calculate the required time period to attain a perpetual zero premium insurance scheme for some 20 (twenty) general insurance companies incorporated in Bangladesh.

In this paper we examine two aspects of the temporary increase in the UK Annual Investment Allowance (“AIA”) maximum, allowance, raised from £200,000 to £1m for the calendar years 2019 and 2020 by UK Finance Act 2019 section 32 and Schedule 13. First we scrutinize the technical operation of the legislation as it affects taxpayers with accounting years that do not correspond exactly with the commencement or termination of the increase. We conclude that there is a potential timing trap for businesses whose accounting period begins during the temporary increase but extends beyond the termination on 31 December 2020. This pitfall can dramatically diminish the available allowance from the headline figure depending on the precise timing of the qualifying expenditure. Secondly, we look at the impact of the temporary increase on the cost of capital for a multinational company when there is the opportunity for profit shifting, comparing this to a UK firm with no such possibility. We show that increased AIA will bring down the cost of capital for UK firms that cannot profit shift to a level similar to that for firms that do migrate profits abroad. In contrast, we find that not only is the cost of capital already lower for firms with opportunities for profit shifting, but also AIA is likely to be less effective in reducing their cost of capital. This in turn suggests that the AIA will not be so successful in stimulating investment by firms that engage in profit shifting. At the same time, the more generous allowance is associated with a narrow tax base for all taxpayers, which would reduce revenue to the UK Exchequer without the intended investment stimulus for many UK firms.

The main objective of this paper is to investigate the quantitative impact of International Financial Reporting Standards (IFRS) on accounting components. IFRS 1 requires IFRS adopter firms to prepare comparative information under IFRS and under local GAAP, which is termed as IFRS-Local GAAP (e.g., IFRS-UK GAAP for the UK) reconciliation statement. This statement shows every accounting line item (in all financial statements) under two accounting systems for the same accounting period, which helps us to know the differences between local GAAP and IFRS. Analysing 1153 Australian listed firms’ reconciliation statements, this study documents that investment value is 35.38 percent higher in IFRS relating to investment value under local GAAP. Financial assets are shown 28.48 percent higher in IFRS relating to financial assets under local GAAP; goodwill is valued 22.60 percent higher in IFRS relating to goodwill value under local GAAP. On the other hand, retained earnings decrease by 23.3 percent under IFRS compared to retained earnings under local GAAP. More importantly, net income increases by 5.64 percent under IFRS compared to those under local GAAP. The findings of this study suggest that IFRS affects significantly accounting components which indicates the value relevance of IFRS. In addition, this study shows the importance of understanding the differences between local accounting standards and international accounting standards. This study will also be beneficial for investors, decision makers, preparers of financial statements, and other users of accounting information. More importantly, this study will be useful to those countries planning to adopt or in the process of adopting international accounting standards (e.g., Indonesia, Japan).

The article presents the research results of the efficiency and financial feasibility of the underground infrastructure construction assessment methods. The efficiency types, performance criteria, basic assessment principles for project efficiency throughout the accounting period are considered. The assessment algorithm of the project efficiency is worked out.

A major trend challenging both tax professionals and the Internal Revenue Service (“IRS” or “Service”) is ever-accelerating globalization, and the resulting compliance challenges of international tax administration. United States (“U.S.”) taxpayers with interests in foreign corporations often need to report their interests to the IRS by including Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, with their annual income tax return. To facilitate timely compliance, Congress imposed penalties for non-compliance starting at $10,000 for each annual accounting period with which a failure to file exists. This article will review Form 5471, who must file it, what information it must contain, how to challenge a penalty, how to correct non-compliance and the impact of the new tax legislation.

The research objective of this paper is to compare the current approaches in reporting of gross written premium in selected Central and Eastern European countries. Under current Czech regulations, the gross written premium in majority of Czech insurance companies is charged under the payment method set in the contract (i.e. annually, quarterly, monthly, etc.), however revenues from gross written premium for the accounting period are always shown in the proper amount. Our research confirmed that presented information about gross written premium in various jurisdictions is based on different methodologies and proved that for the comparability of data and for their information capability there is crucial to develop a precise definition of gross written premium; only in such case there would be possible to ensure the credibility of statistical data. Using these incomparable data may lead in many cases to misleading conclusions when evaluating the level of insurance in various countries and regions.

The supply chain of a product is essential for understanding its environmental impacts. As parts of agricultural product supply chains, land use (LU) and land use change (LUC) are considered to be major contributors to global CO2 emissions. Nevertheless, LU and LUC (LULUC) are rarely included in GHG estimations for food and feedstuffs. Here we propose a method which can be used to derive emissions from LU and LUC on a regional level. Emissions are distributed over an accounting period chosen to match the physically occurring carbon fluxes. As fluxes from soil organic carbon persist for years or even for decades after a LUC episode, depending on the climatic conditions of the region, we apply 10 and 20 years as suitable accounting periods for tropical and temperate climate zones, respectively. We compare the proposed method with two other methods proposed in the literature. Using two types of feedstuffs (Brazilian soybean-meal and Austrian barley) as examples, we find that the other two methods produce mostly lower emission estimates in the case of Brazilian soybeans, and higher estimates for Austrian barley. We conclude that these differences are caused mainly by different accounting periods and by a (non)consideration of regional specificities. While analysing life cycles necessarily entails a well supported – but still arbitrary – setting of such system boundaries, we argue that the methodology presented here better reflects actually occurring carbon fluxes that we understand to be the foundation of any environmental product assessment.

The economic feasibility of supercritical processes by a business plan strategy has been investigated using as a model the continuous CO 2 fraction of liquid capsicum oleoresin. First, the SWOT matrix of the process has been determined from internal and external analyses, revealing the interest of the process for industrial application and the necessity of a detailed economic analysis. In a second step, the investment and financial analyses have been determined for two different scenarios related to the location of the plant, i.e. within the facilities of the university on the one hand, or as an enlargement of an existent paprika factory, on the other. In this second scenario the pay-back period for the capital investment is 3.5 years and the margin of safety ratios over the accounting period 2011–2015 varies in the interval 2–3, indicating the healthy situation of the project. Finally, sensitivity analysis extends the robustness of the economic evaluation described in this work by revealing slight differences in payback periods and financial ratios when underestimations of 10% of the fixed capital investment and operating costs and of the 5% interest rate are considered. The presented results conclude the economic feasibility of this supercritical process and extend conventional economic analysis by the use of a business plan strategy.

Green accounting is a debated issue. This pilot study for the first time estimates the values of China's forest resources and calculates its forest green GDP. It relies primarily on existing data on previously published information by the government in China. Our estimates indicate that the total stock value of forestlands and standing timber in 1999 was 4564.43 billion Yuan (RMB) in China, in 2003 was 5273.05 billion Yuan, and the sum of flow values of forest resources from 1999 to 2003 was 11,072.36 billion Yuan annually. In the value of forest ecological services, the value of water conservation was largest, and the value of air pollution and dust purifying was least. The nation's eaGDP (environmentally adjusted GDP) for forest in 1999 was 9281.55 billion Yuan, Larger than GDP of 8967.71 billion Yuan, the eaNDP (environmentally adjusted NDP) for forest was 9280.73 billion Yuan, was about 1.05 times that of the NDP. In 2003 both of the eaGDP and eaNDP for forest calculated by the production method at the marketing price exceeded the conventional GDP and NDP, but the annual average growth rate of eaNDP for forest was 10.68%, less than the annual average growth rate of NDP 11.27% during the accounting period, which mostly caused by the increased depreciation value of the planted forest, and the loss of forest resource assets and degradation of forest environment assets since the greater economic development in recent years in China. We propose that forest compensation should be enhanced, and the legal protection of forests should be strengthened, as well as the economic activities which cause deterioration in forest service functions should be avoided or at least minimized.

Success in forecasting and analyzing sales for given goods or services can mean the difference between profit and loss for an accounting period and, ultimately, the success or failure of the business itself. Therefore, reliable prediction of sales becomes a very important task. This article presents a novel sales forecasting approach by the integration of genetic fuzzy systems (GFS) and data clustering to construct a sales forecasting expert system. At first, all records of data are categorized into k clusters by using the K-means model. Then, all clusters will be fed into independent GFS models with the ability of rule base extraction and data base tuning. In order to evaluate our K-means genetic fuzzy system (KGFS) we apply it on a printed circuit board (PCB) sales forecasting problem which has been used as the case in different studies. We compare the performance of an extracted expert system with previous sales forecasting methods using mean absolute percentage error (MAPE) and root mean square error (RMSE). Experimental results show that the proposed approach outperforms the other previous approaches.

This article evaluates the technical efficiency of toll companies, i.e., how toll companies perform relative to each other, their productivity, and whether toll companies improve their efficiency from one year to the next relative to the best performers. The rationale for this study is that Norwegian road toll companies have been criticized for not being as efficient as they should; it has been claimed that some have very large operational costs compared to their peers and hence are inefficient. The framework for analysis is Data Envelopment Analysis and its subsequent Malmquist Productivity indices. The data are from the accounting period of 2001–2004 and contain information on 18 companies. The results show that: (1) there is a potential for efficiency increases of about 14%, (2) there are economies of scale in the industry in that larger companies (as measured by number of lanes served) tend to be more efficient compared to smaller companies, and (3) there has been a productivity increase in the sector of about 1%, and this progress is due more to companies employing a newer and more effective method for collecting funds and less to improving efficiency from one year to the next. Finally, these findings suggest that the Norwegian road authorities should consider reorganizing the toll sector such that the inherent economies of scale are utilized.

The concept of sustainable development (SD) has a pre-eminent place in the environmental policy agenda where it is defined as “development which meets the needs of the present without compromizing the ability of future generations to meet their own needs" (United Nations World Conference Environment and Development, 1987, p. 8). Within the accounting literature, research activity has focused on what SD may mean for business and accounting activity (see, for example, Batley & Tozer, 1993; Canadian Institute Chartered Accountants, 1993; Gray, et al., 1993; Gray, 1994; Rubenstein, 1994; Geno, 1995; Stone, 1995; Gray & Bebbington, 1996; Milne, 1996; and Bebbington & Thomson, 1996). As part of this literature Gray (1992) proposes the construction of an “account of sustainability" utilizing the idea of a sustainable cost calculation (SCC) which attempts to measure the additional costs which would be borne by the organization if the organization’s activities were not to leave the planet worse off at the end of an accounting period. This paper reports on an attempt to construct a SCC for Manaaki Whenua, Landcare Research New Zealand Ltd. The paper explains why such an account was attempted, outlines the SCC, reviews the attempt to perform the calculations and reflects on the tensions which emerged from the case. The case, while being unsuccessful because it failed to produce the numbers expected, was successful in that it highlighted conceptual mis-specifications of the SCC. This paper builds on this insight and attempts to theorize the research process and reconceptualize the SCC in a manner which seeks to avoid the pitfalls of the original SCC.

The paper analyzes the ways of reporting other comprehensive income (OCI) and their relationships with three different variables, i.e. the volatility, the sign and the total amount of such accounting items. In order to investigate the reasons of such relationships, the study considers the final annual financial statements approved for the accounting periods from 2009 (i.e. the first year in which the 2007 revision of IAS 1 was applied) to 2012 by Italian companies which are required to apply the International Financial Reporting Standards and to follow their updates since 2005. The choice of this specific sample is due to the willingness of verifying the ways of departing from a strong Italian accounting traditional culture which does not consider other comprehensive income (OCI items have never been mentioned by Italian civil code and have not been included in Italian financial reporting). Some preliminary results emphasize the relevance of OCI items. In each accounting period, the majority of the analyzed financial statements show a significant impact of OCI on net income (each amount in absolute value) over a materiality threshold of 10%. In some years also the difference between ROE measured with net income (NI) and ROE measured with comprehensive income (CI) is statistically significant. It demonstrates that the prominence of OCI in evaluating firmsÕ performance potentially should not be ignored. Moreover, the median of changes in OCI is greater than the one of changes in net income, showing that OCI is more volatile than NI. After such preliminary analysis, a logistic analysis has been implemented by considering the above-mentioned variables. Such study brings some important results confirming the significance of the relations between the ways of reporting other comprehensive income and both the sign and the total amount of such accounting items. The analysis has been implemented by using also different versions of the dependent variable in order to investigate the impact of the OCI presentation in two statements which are positioned in two different (i.e. following) pages. So, while the predominance in the use of two statements for OCI presentation shows the willingness to emphasize the traditional profit or loss section and may be related to the influence of a strong Italian accounting traditional culture, the reasons of the use of two different pages for such presentation may represent the signal of Òaccounts managementÓ.

In this paper, we propose the use of the Markov-switching filter to identify investment spikes. In using Markov-switching filter, we apply a first-order two-state Markov-switching mean model to the investment rates de-trended using Hodrick and Prescott's (1997) filter. A Gibbs-sampling procedure is used to produce the marginal posterior distributions of unobserved state variables and model parameters. Among other advantages, this filter allows us to identify multi-year investment spikes. Some investment projects are so large that they last more than one year. Thus, a single annual accounting period would not necessarily reflect the total expenditure necessary to complete the project. Furthermore, even a year-long project need not start at the beginning of an accounting year nor reach completion by the end of an accounting year. We estimate the filter using Compustat data over the period 1988 to 2007 for 504 firms without any missing values in the period. We find that some 86% of firms have lumpy investment using the filter with the 5% level of significance. We also categorize about 12% of firm-years in the sample as having investment spikes.

We study the relationships, for the case of Germany, between inequality in the annual earnings distribution, and subannual inequality and mobility during the course of the year. The study builds on an exact decomposition framework outlined in Wodon and Yitzhaki (2003), and in Yitzhaki and Wodon (2004). The study shows that inequality in the subannual monthly earnings distributions is significantly higher than in the annual earnings distribution. Further, it shows that the mobility component of the decomposition, as measured by Gini correlation coefficients, changes over the observation period. That it changes makes it difficult to predict the impact of the income accounting period on inequality in a more general context. Thus, in distributional analyses it is of paramount importance to use income data from a uniform accounting period.

This paper builds on and contributes to the currently emerging literature on CFO’s compensation and turnover. We focus on the association between the CFO’s compensation and turnover and his/her “accounting talent.” We contend that the accounting talent of CFOs can be measured by accounting errors that occur when a country moves to the International Financial Reporting Standards (IFRS) by adopting a “big bang” approach, in which all firms have to adopt IFRS within the same accounting period without the opportunity of early or late adoption. We hand-collect eighteen different accounting errors for a sample of 280 Australian companies. These are then used to calculate the CFO’s accounting talent. We find (i) a positive relation between the CFO’s accounting talent and the CFO’s compensation ex ante in the transition year, (ii) a positive relation between the CFO’s accounting talent and the CFO’s bonus in the subsequent year (adoption year) and (iii) an inverse relationship between the CFO’s accounting talent and CFO turnover in the subsequent year (adoption year). Further tests on the Chief Executive Officer’s (CEO) accounting talent and compensation and alternative specifications of our variables confirm our results.

This paper evaluates the effect of the transition from lagged to contemporaneous reserve accounting for the determination of bank reserve requirements through its impact on the market for Federal funds. The results indicate that increased target reserve uncertainty resulting from the implementation of the contemporaneous reserve accounting system (CRA) caused an initial increase in intraday Federal funds rate variance and daily interest rate differences. However, subsequent to a ‘learning’ period, intraday variance appears to be less pronounced and daily differentials appear to be narrower than under the previously used lagged reserve accounting system (LRA). These results are attributed to the lengthening of the accounting period from one to two weeks. Therefore, while not costless, the new system does not appear to have seriously disrupted the Federal funds market.

An attempt will be made to study the impacts of government policies on the distribution of income, paying close attention to the corresponding response of the different macroeconomic aggregates and balances. The Social Accounting Matrix (SAM) will be chosen as the working instrument. A numerical version of the SAM, constructed from the System of National Accounts (SNA), will serve as the basis for the construction of an algebraic version of the same matrix for Portugal. This methodological choice was linked to the fact that, underlying the SAM, there are interrelated subsystems that, in the numerical version of the matrix, provide an analytical picture of the circular flow or general equilibrium interactions of the market economy, when studied during a particular accounting period. On the other hand, in the algebraic version of the SAM, it is possible to measure and quantify the economy-wide effects of changes in the particular nominal flows represented by the numerical version (injections from and leakages into the system), which might be the result of policy measures. To this end, a computable (numerically solvable) general (economy-wide) equilibrium (macroeconomic balance) approach will be adopted. A SAM-based model will be constructed in perfect consonance with the SNA, in which each cell is defined with a linear equation or system of equations, whose components are all the known and quantified transactions of that system, using the parameters of the numerical SAM that served as the basis for this model. Scenarios will be defined and analyzed from experiments carried out in relation to the distributional impact of government policies.

The use of financial ratios by analysts to compare the performance of firms from one accounting period to the next is of growing importance with continued European economic integration. Recent studies suggest that the individual component series of financial ratios exhibit nonstationarity which is not eliminated by the ratio transformation. In this paper, we derive a generalised model that incorporates stochastic and deterministic trends and allows for restricted and unrestricted proportionate growth in the ratio numerator and denominator. When the individual firm series are included in a panel structure with large N and small T, we are unable to reject convincingly a joint hypothesis of nonstationarity, whilst in about one third of the individual firm panels there is no evidence of a unit root. Although the components of financial ratios are correlated variables, our estimates show that any cointegrating effects decay rapidly.

The aim of this paper is to empirically evaluate the effect of the length of the accounting period on indices of inequality of household income in Israel. There are three main findings: (1) The analysis of the impact of the account period on the Gini index of inequality can be done in a way which is identical to analyzing the effect of the accounting period on the coefficient of variation; (2) Changing the accounting period from one month to three months decreases, on average, the Gini index of inequality by about 1.7%. Furthermore, the Gini index calculated from a three-month accounting period was 3.9-4.1% higher than the index based on a twelve-month period. The change in the accounting period from twelve months to three months accounts for 27 to 37 percent of the increase in inequality in the last two decades, depending on the type of income considered. (3) The above relationship is stable over the years but is sensitive to the definition of income.

In this paper we evaluate the financial performance of virtually all of the branch offices of a large European savings bank for a recent sixmonth accounting period. We employ a complementary pair of nonparametric techniques to evaluate their financial performance, in terms of their ability to conserve on the expenses they incur in the process of building their customer bases and providing customer services valued by the bank. We find substantial variation in the ability of branch offices to perform this task, and substantial agreement on the identity of the branches at the bottom of the performance distribution. We then employ parametric techniques to determine that the list of indicators on which their financial performance is currently evaluated can be substantially reduced without statistically significant loss of information to bank management. Both findings suggest ways in which the bank can increase the profitability of its branch network.

This paper presents results from the first study to examine the extent and character of relative earnings mobility in a Third World country. It also tests the hypothesis that one year accounting periods overstate inequality differences between developed countries and less developed countries that are growing rapidly. In Malaysia, the country selected for the initial test of this hypothesis, men experience considerable relative earnings mobility. Seventy four percent of the sample moved one decile or more during the period examined; this mobility is predominantly permanent in nature. Both the extent and permanence of mobility found for Malaysia exceed levels found in comparable studies of the United States. Extending the accounting period from one to 10 years reduces measured inequality by 12%. These results support the hypothesis that single year measures of inequality overstate differences in inequality levels between developed and less developed countries.