Editorial Notes

It was initially apparent that the literatureconcerning traditional accountingand reporting and environmental accountingand reporting has developed astwo independent, and competing, discourseswith the implication that managingperformance along the two dimensionsof financial and environmentalperformance cannot be satisfactorilyachieved without compromising onedimension of performance for the benefitof the other. More recently this haschanged as companies and researchershave understood the need to incorporatesocial and environmental informationinto traditional reporting. Indeed this hasbecome so accepted that the triple bottomline form of reporting is graduallybeing replaced by integrated reporting,although this change is not universallyapproved of. Nevertheless change isslowly taking place – not just in the formof reporting but also the techniquesavailable. This change is brought aboutby the current focus upon sustainabilityand the need to account for the emissionsof greenhouse gases and other pollutants,a concern with human rights especiallyin the form of health and safetyissues and issues brought about by theincreasing need to operate, and thereforereport, into a global environment.Alongside these changes have been others.So for example the concept of corporatesocial responsibility has becomeubiquitous – in all walks of life andworldwide – and it is not possible to beoblivious to the concern with this issuewhich is gathering pace throughout theworld. Nor it is possible to escape fromthe plethora of calls for action or statementsof intent which surround this conceptas far as corporations are concerned.The concept of responsibilityalso needs however to apply to otherforms of organisation such as not forprofit organisations and governments.More significantly it needs also to applyto us all as individuals.You will be aware that in the CSR literature,Corporate Social Responsibility isoften associated with the management ofrisk. In practice, CSR has become increasinglyimportant part of the processof corporate risk management. For examplein The Ernst & Young BusinessRisk Report 2010, social acceptance riskand CSR was mentioned as amongst thetop 10 risks for business. From a corporaterisk management point of view, it isimportant that we do responsible thingsbut also that we do things responsibly.Thus concern must not be focused onlyon risks associated with different CSRdimensions and activities but also withCSR as a part of responsible management,especially a part of responsiblerisk management. The key question wasnot only how negative CSR impacts canbe minimised but also how CSR opportunities can be maximised and CSR usedas a value enhancing concept.Ethics of course has a major part to playin dealing with the management of risk.And another area in which it figuresprominently is that of corporate governance.The recent sub-prime mortgagescandal in the USA effectively tippedthe world into recession while problemswith banks have continued to unfold.Not least of these is the lack of control atUBS leading to large losses and otherscandals. These are all issues which corporategovernance is designed to addressand prevent. Instead we have seen thelaxities in our approaches to doingthings despite the vast improvement inour collective knowledge and awarenessof the very many issues that surroundcorporate governance. Although thesecrises are indicative of the urgent needfor a change, however, the directionsand nature of the change required remainsan open guess at the moment.Consequently, there is obviously a widegap in our collective knowledge on howbest to deal with the contentious issuesthat may have precipitated these crises.Part of the fundamental problems is ourapparent disagreements on the rootcauses of these crises. Whilst we agreeon some of the causes, such as fraudulentfinancial reporting, greed and recklessness,and poor regulatory oversights,we nonetheless hold wide divergingviews on other potential causes, such asthe role of short termism vs. longtermism, executive compensations, poorrisk attitude, hedge funds and their regulationsetc. It is therefore not surprisingthat we are also still very unclear aboutthe solutions to the corporate governancechallenges confronting us. Whilesome have suggested a globalised corporategovernance code that harmonisesthe existing codes which countries canadopt as their national codes or evenadapt to their specific needs, others havecautioned against what has been describedas ‘ a one size fits all’ approach.While calls have been made in somequarters for more stringent regulatoryframework, others have strongly cautionedagainst regulations overloadwhich may eventually stifle managementand distract them from creating values inthe organisation.Thus the discourse of issues which are inneed to further attention continues toevolve and the topics dealt with in thisjournal evolves with it. Indeed the aim inthe production of this therefore is to furtherthe discourse. In doing so howeverit is also one of changing this global villageinto a global community. And in acommunity everyone has a voice, eventhose dissenting – again one of the aimsof this journal. So I encourage you tojoin this discourse and help shape it bypublishing your papers in the journal.There is nothing further to say at thispoint, from an editorial perspective, exceptto read the content and more particularlycontribute to the debate

Accounting for business combinations: (Un)desirable uniformity?

For many years, two methods existed alongside each other in the USA to account for business combinations: the pooling of interests method, applied to operations, such as mergers, that met all the conditions as stated at APB Opinion No. 16; and the purchase method for all other combinations. This dual accounting status was also widespread through many other countries, although some included substantial GAAP differences (e.g. USA versus UK) or applied restrictions to the application of those methods. The 1998 G4+1 Position Paper concerning business combinations recognized the inconvenience of this diversity in accounting and recommended the use of a single method, preferably the purchase method. Following a long period of discussion and controversy, as is usual when the business combinations topic is on the table, FASB published in 2001 the SFAS No. 141, which confirmed the purchase as the unique method for business combinations accounting. Simultaneously FASB also issued SFAS No. 142, which replaced goodwill amortization for impairment tests. In the meantime, IASB also started a business combinations project scheduled in two phases. The first has produced already IFRS 3, issued in March 2004, which also determined the purchase method as the single way for business combinations. The second phase is still in course and will provide guidance about the purchase method application (or ‘acquisition method’, as the board meanwhile decided to rename it). Once again, this topic has proved to be a very fertile ground for discussions, as IASB apparently dropped the ‘fresh start’ application and issued an ED with proposed amendments for the recently published IFRS 3. In the UK, business combinations accounting is still ruled by FRS 6 and FRS 7, which are not aligned with IFRS 3 and further IASB proposals. ASB is monitoring the IASB project and it is very likely to adopt its GAAPs, which means that business combinations accounting in the UK will change very soon. The accounting trend for business combinations seems now clear, but many questions remain, such as, was the pooling of interests method ban a major loss? Which challenges arise from replacement of goodwill amortization for impairment tests? With this paper the authors intend to discuss how and if business combinations accounting uniformity is indeed desirable, highlighting advantages and disadvantages, benefits and eventual problems for professionals and stakeholders. A final note to stress is that this paper deals with uniformity of business combinations accounting and not with international accounting harmonisation, to which we are required to refer since it is inherent to recent developments within this topic.The Institute of Chartered Accountants in England and Wale

Business combinations accounting in the United States from AICPA to FASB: a study on the impact on M&A activity

This paper summarizes the problematic of accounting for business combinations since the 1960s. Albeit widely supported by the industry, the use of pooling of interests has been always subject to criticism, particularly from practitioners and academicians (see e.g. AAA, 1966; Mosich, 1968). In 1996, FASB added business combinations accounting to its agenda, with the purpose to improve its transparency. FASB would disallow the use of pooling of interests, despite numerous negative reactions from industry. Nevertheless, a later proposal of replacement of purchased goodwill amortization by impairment testing seems to have mitigated any outstanding criticism. Several authors (e.g. Zeff, 2002) described the fierceness of the lobbying on this FASB’s project. The paper studies whether SFAS 141 and SFAS 142 resulted in relevant economic consequences (see e.g. Zeff, 1978; Burchell et al., 1980; FASB, 1980) and finds that M&A activity has not been significantly affected by FASB’s change

Companies and professional boards’ reactions to new M&A accounting in the USA

Following G4+1 recommendations issued after a meeting in 1998, the Financial Accounting Standards Board (FASB) reshaped dramatically in 2001 the accounting for business combinations, which had remained unchanged for thirty years in the USA. With the publication of SFAS 141, FASB dropped pooling of interests method in favour of purchase method and with SFAS 142 amortization of goodwill recognized as result of a business combination was replaced by impairment tests. Business combinations includes a wide range of deals, such as mergers and acquisitions (M&A), and is arguably one of the most polemic accounting topics ever. AICPA APB opinions issued in 1970 seemed to have praised almost everybody – difficult task given the different views about the most appropriate practice to adopt – although some prominent authors, such as Stephen Zeff, remained opponents of pooling of interests. Others always defended that pooling was the fair method for the real and true mergers and therefore strongly disagreed with G+1 and FASB views, stressing that the new rules would turn impracticable some mergers deals with specific characteristics. The FASB certainly did not intend to change the M&A market dynamic through its new set of accounting rules. Nevertheless, the critical voices raised against the pooling method ban suggested that the M&A activity could have been affected. Therefore, the authors of this paper considered relevant to discuss potential impacts of this new standards. Preliminary results obtained with questionnaires sent to firms included in S&P 500 index will be also presented.London Metropolitan Universit

FARMERS’ SOCIAL RESPONSIBILITY TO LOCAL COMMUNITY: DOES EDUCATION MATTER?

The agrarian discourse of social responsibility as a scientific paradigm is rarely addressed in research. Thus the problem arise how to apply the paradigm of social responsibility to the agrarian discourse so that it could help disclose farmers’ social responsibility to local community and it’s affecting factors. The aim of this study is to propose a methodology for assessing the social responsibility of farmers to local communities with regard to education and to explore further possibilities  of its application. The research is based on original empirical data collected through structured telephone interviews from 1108 Lithuanian farmers in January-February 2017. The results of the study confirm that the agrarian discourse of social responsibility as a scientific paradigm is applicable to disclose farmer’s social responsibility to local community with regard to education. Assessment of other factors affecting farmer’s social responsibility is on demand for future research.Socialinė atsakomybė kaip mokslinė paradigma agrariniu diskursu tyrimuose socialiniams pokyčiams aiškinti naudota itin retai. Straipsnyje sprendžiama problema, kaip taikyti socialinės atsakomybės paradigmą agrariniu diskursu, siekiant, kad ji leistų diagnozuoti ūkininkų socialinę atsakomybę vietos bendruomenėms veikiančius veiksnius. Tyrimo tikslas – pasiūlyti ūkininkų socialinės atsakomybės vietos bendruomenėms vertinimo metodiką išsilavinimo veiksnio aspektu ir numatyti tolesnes jos taikymo galimybes. Tyrimas paremtas originaliais empiriniais duomenimis, surinktais struktūrizuoto interviu būdu 2017 m. sausio–vasario mėn. telefonu apklausus 1108 Lietuvos ūkininkus. Gauti tyrimo rezultatai patvirtina, kad agrariniu diskursu socialinė atsakomybė kaip mokslinė paradigma tinkama diagnozuoti ūkininkų socialinės atsakomybės vietos bendruomenei situaciją vertinant išsilavinimo veiksnį. Tolesniuose tyrimuose tikslinga vertinti kitus aktualius veiksnius ar aspektus, atlikti apibendrintą ūkininkų socialinės atsakomybės vertinimą

Evaluating Sustainability: a Need for Standards

Sustainability is one of the most used words in relation to business activity and reporting atpresent, but its meaning is vague. We argue that its use is based upon the concepts of stewardshipand of the firm as going concerned, coupled with the traditional view of the transformationalprocess of a business. We further argue that this is problematic in the present global environmentwhen stewardship of resources is becoming paramount. We therefore argue that sustainabilityis actually based upon efficiency in the transformational process and equity in thedistribution of effects. We therefore argue for the need for standards in analysing and measuringsustainability and outline a more complete model which recognises distributional implications,and is developed into a model of operationalisability.   Copyright © www.iiste.or

Corporate social responsibility: part II - performance evaluation, globalisation and NFP’s

1st edition, ©201