Historical Cost and Conservatism Are Joint Adaptations That Help Identify Opportunity Cost

Braun (The ecological rationality of historical costs and conservatism. Accounting, Economics and Law: A Convivium, this issue) argues that the traditional accounting principles underlying the revenue-expense approach such as Historical Cost and Conservatism are ecologically rational in that they help organizations survive better in uncertain economic environments. More importantly, Braun argues that the revenue-expense approach generates new private information, which informs markets and makes them more effective (Hayek, 1945, The use of knowledge in society. The American Economic Review, 35(4), 519–530), as opposed to merely reflecting back market data under the asset-liability approach (e.g. Sunder, 2011, IFRS monopoly: The Pied Piper of financial reporting. Accounting and Business Research, 41(3), 291–306). We try to explicate the nature of the new private information generated jointly by Historical Cost and Conservatism, and how this information facilitates the survival of individual entrepreneurs and organizations in market competition

Sprouse\u27s what-you-may-call-its: Fundamental insight or monumental mistake?

We critically evaluate Sprouse\u27s 1966 Journal of Accountancy article, which prodded the FASB towards a balance-sheet approach. We highlight three errors in this article. First, Sprouse confuses necessary and sufficient conditions by arguing that good accounting systems must satisfy the balance-sheet equation. Second, Sprouse\u27s insinuation that financial analysts rely on balance-sheet analysis is contradicted by contemporary and current security-analysis textbooks, analysts\u27 written reports, and interviews with analysts. Third, and most crucially, Sprouse does not recognize that the primary role of accounting systems is to help managers discover and exploit profitable exchange opportunities, without which firms cannot survive

The determinants and consequences of finance committee use

Finance committees are the most commonly created voluntary committees of boards. Finance committees oversee and advise management on financial issues. We study why firms create finance committees and whether firms benefit from using a finance committee. We predict that firms that need finance expertise would benefit the most from having a finance committee, and thus, are more likely to form such a committee. We find that firms are more likely to have a finance committee when they have derivatives, defined benefit pension plans, high leverage and credit ratings, and active dividend payout. We examine the impact of finance committees on investment performance using two proxies, investment efficiency and capital expenditure (capex) guidance quality. We find that firms with a temporary finance committee invest more efficiently and provide capex guidance more frequently. We find no association between finance committee use and capex forecast issuance, accuracy and precision

Measuring investment opportunities using financial statement text

We analyze 10-K texts from EDGAR during 1995-2009 to score firms’ investment opportunity sets on multiple dimensions. We identify 646 unique key words that predict future investments and group them into 62 factors. Industry-specific factors include Bio-Pharmaceutical, Banking, Information Technology, Oil & Gas and Semi-conductor, while more general factors include Impairment, Debt Intensity, Executive Employment, Preferred Stock Buyback and Capital Seeking. Our multi-dimensional measures of firms’ investment opportunities outperform Tobin’s Q and/or industry-fixed effects, in predicting out-of-sample future (2010-15) investments and related corporate policies, and even inform incrementally over lagged dependent variables

Nonlinear Loan Loss Provisioning

The extant banking literature often models loan loss provisions as a linear function of changes in loan portfolio quality. Large sample data indicate that this linearity assumption is invalid and that a V-shaped piecewise linear specification fits much better. Decreases in nonperforming loans are associated with increases in loan loss provisions. This anomalous asymmetric relation is partly driven by the mechanical accounting effects of loan charge-offs on nonperforming loans and allowance for loan losses. We find that, controlling for concurrent loan charge-offs, loan loss provisions move in the same direction as nonperforming loan change, but asymmetry remains. The effect of nonperforming loan increases on loan loss provisions is still twice as large as that of nonperforming loan decreases. We argue that the residual asymmetry is caused by conditional conservatism. We show that loan loss provision asymmetry is greater for banks with more high-risk construction loans and shorter-maturity loans and for public banks, and is more pronounced during economic downturns and in the fourth quarter, consistent with the predictable effects of conditional conservatism

Formulation and Evaluation of Pulsatile Drug Delivery System of Atenolol

The objective of the present study was formulation and evaluation of pulsatile release tablets of Atenolol. A tablet system consisting of cores which was coated with layers of swelling and rupturable coatings. Cores containing Atenolol as model drug were prepared by direct compression with appropriate ratios of lactose and microcrystalline cellulose and then coated sequentially with different ratios of an inner swelling layer containing HPMC and an outer rupturable layer of Ethyl Cellulose. The effect of level of swelling layer and rupturable coating was investigated. The different formulation press coated by using different weight ratios of Hydroxy Propyl Methyl Cellulose (HPMC) / Ethyl Cellulose (EC) / both HPMC and EC. The optimum result was achieved in formulation containing HPMC: EC weight ratios. The F3 batch achieved a highest burst release after the lag time which is applicable pulsatile drug delivery system of Atenolol

Room temperature multiferroicity in orthorhombic LuFeO3_3

From the measurement of dielectric, ferroelectric, and magnetic properties we observe simultaneous ferroelectric and magnetic transitions around $\sim$600 K in orthorhombic LuFeO$_3$. We also observe suppression of the remanent polarization by $\sim$95\% under a magnetic field of $\sim$15 kOe at room temperature. The extent of suppression of the polarization under magnetic field increases monotonically with the field. These results show that even the orthorhombic LuFeO$_3$ is a room temperature multiferroic of type-II variety exhibiting quite a strong coupling between magnetization and polarization.Comment: 5 pages with 5 figures; published in Appl. Phys. Let

Recordkeeping Alters Economic History by Promoting Reciprocity

We experimentally demonstrate a causal link between recordkeeping and reciprocal exchange. Recordkeeping improves memory of past interactions in a complex exchange environment, which promotes reputation formation and decision coordination. Economies with recordkeeping exhibit a beneficially altered economic history where the risks of exchanging with strangers are substantially lessened. Our findings are consistent with prior assertions that complex and extensive reciprocity requires sophisticated memory to store information on past transactions. We offer insights on this research by scientifically demonstrating that reciprocity can be facilitated by information storage external to the brain. This is consistent with the archaeological record, which suggests that prehistoric transaction records and the invention of writing for recordkeeping were linked to increased complexity in human interaction

Micro-Farming Situation Observed through Manual Discriminant Analysis

Micro-farming situation is a relatively homogeneous farming situation conceptualised by the farmers themselves on the basis of certain agro-ecological and socio-economic criteria. These criteria are more holistic in its coverage than those used during identifying conventional recommendation domains. The article outlines the rationale of observing a micro-farming situation, proposes a method to carry on such exercises and points to certain areas of further research. Not only technology positioning, but also a methodological insight can be developed from such exercises. With some modifications this can be used as a participatory research tool during the study of farming systems, especially in the resource-poor CRD agriculture

Profile of Neonatal Septicaemia at a District-level Sick Newborn Care Unit

Although sepsis is a major cause of morbidity and mortality among newborns in resource-poor countries, little data are available from rural areas on culture-proven sepsis. The aim of the present study was to provide information in this regard. The study reports results on the incidence and aetiology of neonatal sepsis cases admitted to a facility in a rural area in eastern India. Blood culture was done for all babies, with suspected clinical sepsis, who were admitted to the sick newborn care unit at Suri where the study was conducted during March 2009–August 2010. A standard form was used for collecting clinical and demographic data. In total, 216 neonatal blood culture samples were processed, of which 100 (46.3%) grew potential pathogens. Gram-negative infection was predominant (58/100 cases) mainly caused by enteric Gram-negative bacteria. Klebsiella pneumoniae was the most common Gram-negative isolate. The emergence of fungal infection was observed, with 40% of the infection caused by yeast. Gram-negative organisms exhibited 100% resistance to ampicillin, cefotaxime, and gentamicin. Amikacin and co-trimoxazole showed 95% (n=57) resistance, and ciprofloxacin showed 83.3% (n=50) resistance among the Gram-negative bacteria. Carbapenem showed emerging resistance (n=4; 6.6%). Results of analysis of risk factors showed an extremely significant association between gestation and sepsis and gender and sepsis. Gastrointestinal symptoms were highly specific for fungal infections. One-third of babies (n=29), who developed culture-positive sepsis, died. Blood culture is an investigation which is frequently unavailable in rural India. As a result, empirical antibiotic therapy is commonly used. The present study attempted to provide data for evidence-based antibiotic therapy given to sick newborns in such rural units. The results suggest that there is a high rate of antibiotic resistance in rural India. Urgent steps need to be taken to combat this resistance