Increasing convergence between the recognition of an intangible asset for financial accounting purposes and strategic management accounting and project management techniques

New management techniques such as 'just-in-time', 'lean manufacturing' and 'Six Sigma' allow management accountants to shift their focus from the management and control of production processes to the management of strategic issues. This paradigm shift resulted from shorter product life cycles, due to technological advances and a more competitive business environment. Recent revisions to the International Accounting Standards which are particularly supportive of life cycle costing and project management are likely to increase the focus on strategic management accounting further. This article describes developments in management accounting and the recent convergence of financial reporting in terms of International Accounting Standards with strategic management accounting and project management techniques. Strategic management accounting (particularly life cycle costing) involves applying project management techniques and using the calculus of investment to manage the project as a whole. This contrasts with managing only costs and revenues during the manufacturing phase of a project. The article demonstrates that project management techniques and the calculus of investment provide the information needed to account for the value of a project in terms of IAS 38: Intangible Assets. This will ultimately give rise to both improved decision-making and more relevant financial reporting

Proposed statement of position : Accounting for foreclosed assets;Accounting for foreclosed assets; Exposure draft (American Institute of Certified Public Accountants), 1990, Dec. 11

This proposed statement of position (SOP) provides guidance for financial reporting of foreclosed assets after foreclosure. Briefly, the proposed SOP recommends the following: 1. There is a presumption that foreclosed assets will be sold. 2. Foreclosed assets that will be sold should be carried at the lower of cost or fair value. 3. Periodic net cash payments related to foreclosed assets held for sale should be charged to income; periodic net cash receipts related to foreclosed assets held for sale should be credited to the assets\u27 carrying amount; no depreciation or amortization expense should be recognized. 4. The carrying amount of foreclosed assets held for the production of income instead of sale should not exceed net realizable value; revenue and expense cash flows are recognized in income; depreciation or amortization expense is recognized.https://egrove.olemiss.edu/aicpa_sop/1544/thumbnail.jp

Program accounting: Proposed statement of position, revised draft June 3, 1981

https://egrove.olemiss.edu/aicpa_assoc/1370/thumbnail.jp

Neutrality of narrative discussion in annual reports of UK listed companies

This paper reports the results of an investigation into the neutrality of the narrative discussion of financial performance and position, as evidenced in 179 annual reports of UK listed companies. Neutrality of narrative discussion was determined by comparing the average proportions of good and bad news contained in the narrative and statutory accounts sections of the annual reports. The results of a comparison of the proportion of good news in the two sections of the annual reports suggest that the narrative sections contained a significantly higher proportion of good news than the statutory accounts sections. Comparison of proportions of bad news, however, indicates that the narrative sections contained a significantly lower proportion of bad news compared to the statutory accounts sections. Finally, the results also suggest that the proportion of good news as compared to bad news in the narrative sections is significantly higher than the proportion of good news compared to bad news in the statutory accounts section. The results are consistent with the suggestion that company management highlights good news in narrative discussions. The implications of the findings for company management, users, auditors and regulators are discussed

Proposed statement of position : Environmental remediation liabilities (including auditing guidance);Environmental remediation liabilities (including auditing guidance); Exposure draft (American Institute of Certified Public Accountants), 1995, June 30

This Statement of Position (SOP) consists of two Parts: (1) a nonauthoritative discussion of major federal legislation dealing with pollution control (responsibility) laws and environmental remediation (cleanup) laws and the need to consider various individual state and other non-United States government requirements and (2) authoritative guidance on specific accounting issues that are present in the recognition, measurement, display, and disclosure of environmental remediation liabilities. This SOP does not provide guidance on accounting for pollution control costs with respect to current operations or on accounting for costs of future site restoration or closure that are required upon the cessation of operations or sale of facilities. This SOP also does not provide guidance on accounting for environmental remediation actions that are undertaken at the sole discretion of management and that are not induced by the threat of assertion of litigation, a claim, or an assessment. Furthermore, this SOP does not provide guidance on recognizing liabilities of insurance companies for unpaid claims, nor does it address asset impairment issues. The SOP is written in the context of the operations taking place in the United States, however the accounting guidance is applicable to all operations of the reporting entity. This SOP provides: A. That environmental remediation liabilities should be accrued when the criteria of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, are met, and it includes benchmarks to aid in the determination of when environmental remediation liabilities should be recognized in accordance with FASB Statement No. 5. B. That an accrual for environmental liabilities should include — (1) Incremental direct costs of the remediation effort, as defined. (2) Costs of compensation and benefits for employees to the extent an employee is expected to devote time directly to the remediation effort. C. That the measurement of the liability should include— (1) The entity\u27s allocable share of the liability for a specific site. (2) The entity\u27s share of amounts related to the site that will not be paid by other potentially responsible parties or the government. D. That the measurement of the liability should be based on enacted laws and existing regulations, policies, and remediation technology. E. That the measurement of the liability should be based on the reporting entity\u27s estimates of what it will cost to perform all elements of the remediation effort when they are expected to be performed and that the measurement may be discounted to reflect the time value of money if the aggregate amount of the obligation and the amount and timing of cash payments for a site are fixed or reliably determinable. F. Guidance on the display of environmental remediation liabilities in financial statements and on disclosures about environmental-cost-related accounting principles, environmental remediation loss contingencies, and other loss contingency disclosure considerations. The provisions of this SOP are effective for fiscal years beginning after December 15, 1995. Earlier application is encouraged. The effect of initially applying this SOP shall be reported as a change in accounting estimate. Restatement of previously issued financial statements is not permitted.https://egrove.olemiss.edu/aicpa_sop/1609/thumbnail.jp

Valuation of certain real estate and loans and receivables collateralized by real estate; Exposure draft (American Institute of Certified Public Accountants), 1976, May 25

Statement of Position No. 75-2, issued on June 27, 1975, presents recommendations of the Accounting Standards Division on Accounting Practices of Real Estate Investment Trusts. The Committee on Real Estate Accounting has considered whether the conclusions in that Statement with respect to the valuation of real estate should be recommended to the Financial Accounting Standards Board (FASB) as applicable to companies that are not REITs; the accompanying exposure draft presents the Committee\u27s views on that and related issues.https://egrove.olemiss.edu/aicpa_sop/1364/thumbnail.jp

Statement of position on accounting for investments in real estate ventures, December 29, 1978 : proposal to the Financial Accounting Standards Board; Statement of position 78-09;

https://egrove.olemiss.edu/aicpa_sop/1178/thumbnail.jp

Complimentary Narrative Commentaries of Statutory Accounts in the Annual Reports of UK Listed Companies

This paper, for the first time, classifies narrative information into complementary and supplementary. For the purpose of the paper, complementary narrative information is defined as that information which refers to specific numbers presented in the statutory accounts (profit and loss and balance sheet). Non-specific narrative information is classified as supplementary. Having made the distinction and provided reasons for such a distinction the study investigates the extent of complementary narrative commentaries on numbers from the statutory accounts. The study also investigates which company-specific characteristics are associated with the extent of complementary narrative commentaries. An index consisting of 46 items which must be reported in the statutory accounts was used to measure the extent of complementary narrative commentaries in the annual reports of 170 listed UK companies. the findings suggest that, on average, the companies comment on 3909% of the numbers appearing in their statutory accounts. using the Ordinary Least Squares (OLS) regression model, the results indicate that company size, gearing, profitability, liquidity ratio, the presence of exceptional items, and substantial institutional investment are significantly associated with the extent of complementary narrative commentaries. However, auditory type, directors' share ownership, and the proportion of non-executive directors are not significantly associated with the extent of complementary narrative commentaries. The research has important implications for accounting regulators, users of annual reports and future research into the usefulness narrative information provided in annual reports