AN INVESTIGATION INTO CURRENT PROCEDURES FOR ESTIMATING HEAVE POTENTIAL IN CLAYS

Published ThesisAn investigation into current procedures for estimating heave potential in clays Several low-cost housing developments in South Africa are suffering major structural failures due to heaving clays. Despite geotechnical investigations and various precautionary measures, this remains an on-going trend. The aim of this study was to review the current procedures used in South Africa to estimate heave potential in view of either improving the current procedures or suggesting alternatives. To this end, the research question was as follows: Are the current procedures used in South Africa to estimate heave potential acceptable? In this context, the most popular procedure used in South Africa, van der Merwe’s method, was broken into parts and studied. The research question was answered in the variance of laboratory results obtained from seven leading commercial laboratories which proved that reliable input parameters to van der Merwe’s empirical method are not obtainable. Typically the Atterberg limits and clay fraction results varied significantly producing heave potential classifications that do not accurately reflect the soil characteristics of the samples studied. On this basis, an investigation into methods of estimating heave potential, which are not considered in current South African codes of practice, were studied in order to provide a foundation for future research. A weighed system is proposed to judge the heave potential of soils using various prediction models as a foundation for future research

Duplicate Testing Conducted On The Input Parameters For The Estimation Of Potential Expansiveness Of Clay

Conference: 16Th African Regional Conference on Soil Mechanics and Geotechnical Engineering, At unisia, Volume: Innovative Geotechnics for Africa - Bouassida, Khemakhem & Haffoudhi (Eds.) 2015This paper presents a study conducted on three active clay soils analysed at seven commercial laboratories in South Africa. Commercial test results are often used as input parameters for prediction models used to estimate potential heave expected from active clays, especially when designing foundations for light structures. This paper briefly looks at the typical results obtained from such laboratories and comments on the correlation achieved

Fair value measurements of exchange-traded funds

PURPOSE : To investigate the extent to which different prices within the bid-ask spread are used for fair value measurements and evaluate the potential consequences thereof. DESIGN/METHODOLOGY/APPROACH : The paper investigates different level one fair value measurements of exchange-traded funds’ equity investments. Using descriptive methods, it compares actual and stated fair value measurement policies. In addition, comparative value-relevance of these measurements is investigated in regression analysis. FINDINGS : Most fair value measurements are based on closing prices, but stated accounting policies and actual measurements frequently differ. Results also show that the bid-close spread of underlying investments is value-relevant in determining the bidclose spreads of ETFs themselves. RESEARCH LIMITATIONS/IMPLICATIONS : Findings are specific to unleveraged ETFs, the sample country and sample period used and only apply to investments in listed equities. Conclusions from this study may assist in predicting market perceptions of the risk of listed equity portfolios. PRACTICAL IMPLICATIONS : This paper sheds light on the practical impact of the recent change in fair value measurement guidance. ORIGINALITY/VALUE : This study provides evidence on the size of the bid-ask spread of actual investment portfolios and its potential impact. It shows that bid-close spreads of underlying investments are used to price the bid-close spreads of ETFs themselves and that stated and actual accounting policies often differ. Findings imply that standardsetters might be influenced by actual accounting practices.http://www.emeraldinsight.com/loi/medarhb201

Acquisitions and the value versus growth phenomenon

PURPOSE : To investigate whether investors value the future growth from acquisitions and the subsequent realisations thereof accurately. DESIGN / METHPDOLOGY / APPROACH : The paper calculates conventional and adjusted market-to-book ratios and investigates abnormal cumulative returns over 20 quarters after portfolio formation for a sample of S&P 500 firms using a hedge portfolio and regression approach. FINDINGS : Hedge portfolios formed using adjusted market-to-book ratios underperform conventional hedge portfolios over a five year period. Dividing the hedge into its comprising elements reveals that the underperformance of the adjusted hedge is mainly caused by weaker returns from value firms. RESAERCH LIMITATIONS / IMPLICATIONS : Findings are specific to large firms in a specific setting and future research is needed to determine if findings are equally applicable to other situations. Findings imply that investors underrate the growth from new acquisitions and overrate the extent to which this has materialised. PRACTICAL IMPLICATIONS : The study highlights that the extrapolation of future growth rates should be carefully considered in any equity valuation of a firm with current or past acquisitions. ORIGINALITY / VALUE : This study shows that inaccurate valuation of the growth of new acquisitions and the realisation thereof is at least partially responsible for the value versus growth phenomenon. It shows that the accounting information could be improved and highlights the importance of extrapolating past growth rates with care .http://www.emeraldinsight.com/loi/medarhb2016Accountin

Fair value intensity and analyst forecasts

Analysts’ earnings and book value forecasts play an important role in price discovery in equity markets. As the role of fair value measurements in accounting increases, the impact on analysts’ ability to accurately forecast earnings and book values is unclear. This article develops a method to calculate the degree of fair value measurement in financial statements and investigates the impact thereof on the accuracy of analysts’ book value and earnings forecasts, using a sample of firms listed in the United States and the United Kingdom from 2010 to 2014. Relying on multivariate regression findings, the article shows that greater fair value intensity decreases the 12-month analyst forecast accuracy for earnings in both countries. Moreover, there is some evidence that higher fair value intensity decreases the accuracy of analysts’ book value forecasts. It therefore appears that increased fair value intensity under a mixed measurement approach limits the ability of analysts to forecast earnings, without a compensating impact on forecasts of book values

Long-run Accounting Conservatism and subsequent equity returns

This paper investigates the impact of long-run accounting conservatism on subsequent equity returns. The accounting conservatism proxy used is based on prior research and considered for different possible specifications. In contrast to prior research, this study compensates for the impact of momentum and the accrual anomaly by using five-year subsequent buy and hold total returns. A three-factor Fama and French model finds that accounting conservatism does not have a significant impact on subsequent equity returns for a sample of US firms. Stratifying the sample into pre-crisis and crisis periods does not affect results. However, this study also reveals that firms within certain industries do benefit from increased accounting conservatism, during both pre-crisis and crisis sample periods

Tax preferences, dividends and lobbying for maximum value

BACKGROUND : The value of equity investments depends to some extent on the tax consequences for investors. When groups of investors have different tax preferences, this can lead to conflicting pressures on firms to either retain earnings or pay dividends. The findings of this study will be of interest to researchers of taxation and corporate governance alike, as they highlight the role that corporate shareholders play in the decisions of the firm. Investors and regulators will also be interested in the findings as they reveal more about the interaction between shareholders with conflicting interests. Lastly, changes in behaviour as a result of changes in tax legislation are of interest to those with fiscal responsibility. SETTING : A 2012 dividend tax change in South Africa, which simultaneously altered the tax preferences of individual and corporate investors, provides a unique opportunity to investigate firms’ reaction to their investors’ tax preferences. AIM : This article seeks to determine whether firms respond to changes in their investors’ tax preferences in their decisions to either retain earnings or pay dividends. METHOD : The article investigates the responses of firms to the 2012 dividend tax change using multivariate regressions. RESULTS : Findings show that firms consider changes in the tax preferences of their investors in setting dividend policies. In addition, it appears that corporates have greater success in lobbying for beneficial dividend changes than individuals. CONCLUSION : Changes in investors’ tax preferences impact on firms’ dividend policy decisions. These decisions ultimately affect the value of the firm to its investors.http://www.sajems.orgam2017Accountin

The relationship between conservatism in financial reporting and subsequent equity returns

This study investigates whether or not long-term discretionary accounting conservatism has benefits for equity investors, as measured by long-term subsequent equity returns. Based on the long-term relationship between cash flows and earnings documented by Dechow (1994), this paper develops a new proxy for discretionary accounting conservatism. This proxy utilises earnings before interest and tax and cash flow generated by operations, highlighting conservative discretion within earnings. Importantly, and in contrast to prior research, this study controls for market assessments of the growth prospects of sample firms and finds that discretionary accounting conservatism is insignificantly related to subsequent equity returns, once market assessments of growth prospects have been controlled for. Compensating for cross-sectional differences, based on the relative gearing of firms, reveal that the relationship between subsequent equity returns and discretionary accounting conservatism remains insignificant, regardless of the level of gearing of the sample firm.http://www.sajar.co.zaam201

Strain behaviour of an eco-car wheel rim designed through topology and composite layup optimization

This research aimed to reduce the mass of a purpose built eco-car wheel through the sequential use of structural topology and composites optimization software packages while investigating the changes in mass and strain behaviour resulting from altering component geometry, lamina shape, and stacking sequence. The strain behaviour of a commercially available wheel constructed using pre-tensioned steel spokes was established through the comparison of measured physical and FEA strains resulting from applied pressure, radial, lateral, torsional, and combined loads. Structural topology optimization software was then utilized to produce 48 different wheel geometries corresponding to a combined loading scenario consisting of pressure, radial, and lateral loads. The variables controlled during this process included the objective optimization function, safety factor, target design volume, split-draw constraint, and degrees of cyclic symmetry. The optimum geometry was determined by means of evaluating specific stiffness and potential towards being manufactured as a composite component. Three composite wheel FEA base models, with uni-directional laminae stacked at different fibre orientation intervals, were created according to this geometry and lightened by means of composite free size optimization. Composite sizing and shuffling optimizations were then utilized to further enhance the mass and strain characteristics of the lightest of these three solutions Two composite wheels were manufactured according to the wheel geometry, lamina shapes, and stacking sequences determined by means of structural topology and composites ptimizations. The physical mass and strain behaviour of these wheels were measured and compared to those corresponding to the optimized FEA model, as well as the commercially available wheel. This comparison showed that structural topology and composites optimization software packages can be sequentially utilized to produce an adequately stiff composite wheel of lower mass than a commercially available wheel constructed using pre-tensioned steel spokes

Fair value intensity an analyst forecasts

Analysts’ earnings and book value forecasts play an important role in price discovery in equity markets. As the role of fair value measurements in accounting increases, the impact on analysts’ ability to accurately forecast earnings and book values is unclear. This article develops a method to calculate the degree of fair value measurement in financial statements and investigates the impact thereof on the accuracy of analysts’ book value and earnings forecasts, using a sample of firms listed in the United States and the United Kingdom from 2010 to 2014. Relying on multivariate regression findings, the article shows that greater fair value intensity decreases the 12-month analyst forecast accuracy for earnings in both countries. Moreover, there is some evidence that higher fair value intensity decreases the accuracy of analysts’ book value forecasts. It therefore appears that increased fair value intensity under a mixed measurement approach limits the ability of analysts to forecast earnings, without a compensating impact on forecasts of book values.https://www.jefjournal.org.zaam2019Accountin