SOLUTIONS FOR MEASURING THE FAIR VALUE OF THE WORKFORCE

For the past decades International Accounting Standards and other Anglo-Saxon standards, for example the American ones, had promoted fair value as a valuation basis for the elements of the financial statements. Thus, the quality of the financial informatifair value, workforce, employee benefits, share options

PRINCIPLES- AND RULES-BASED ACCOUNTING DEBATE. IMPLICATIONS FOR AN EMERGENT COUNTRY

By a qualitative analysis, this research observes whether a principles-based system or a mixed version of it with the rules-based system, applied in Romania - an emergent country - is appropriate taking into account the mentalities, the traditions, and other cultural elements that were typical of a rules-based system. We support the statement that, even if certain contextual variables are common to other developed countries, their environments significantly differ. To be effective, financial reporting must reflect the firm's context in which it is functioning. The research has a deductive approach based on the analysis of the cultural factors and their influence in the last years. For Romania it is argue a lower accounting professionalism associated with a low level of ambiguity tolerance. For the stage analysed in this study (after the year 2005) the professional reasoning - a proxy for the accounting professional behaviour - took into consideration the fiscal and legal requirements rather than the accounting principles and judgments. The research suggest that the Romanian accounting practice and the professionals are not fully prepared for a principles-based system environment, associated with the ability to find undisclosed events, facing ambiguity, identifying inferred relationships and using intuition, respectively working with uncertainty. We therefore reach the conclusion that in Romania institutional amendments affecting the professional expertise would be needed. The accounting regulations must be chosen with great caution and they must answer and/ or be adjusted, even if the process would be delayed, to national values, behaviour of companies and individual expertise and beliefs. Secondly, the benefits of applying accounting reasoning in this country may be enhanced through a better understanding of their content and through practical exercise. Here regulatory bodies may intervene for organizing professional training programs and acting towards the improvement of the codes of conduct's effectiveness.emergent countries, rules or principles-based system, IFRS

Solutii pentru masurarea calitatii informatiei contabile

There are many studies confirming the theory according to which the decisions of the users of the accounting information depend on the quality of this very information, namely its intrinsic quality, as well as its impact through publication. We undertake to test the extent to which the intrinsic quality of the accounting information is assured by the internal means of obtaining the information. The analysis is performed on the Romanian market and takes into account the qualitative characteristics of the accounting information contained within the IASB conceptual framework. We have opted for the data analysis using the technique of the study case and for methods of economic analysis applicable in accounting. After having checked the relevance of the conceptual framework, we have identified the prerequisites, the criteria and, respectively, the measurable quality parameters. We have monitored the influence of these explanatory variables in respect of the topic analysed through the study case, and we have considered the level of quality assurance. The contribution of the study consists of new explicit sub-criteria for the assurance and control of the accounting information, which enrich the accounting theory, and, of an instrument for assessing the quality of the information to be offered to the users, namely managers, but also consultants, who can use it in practice and base their analyses and decisions on it.Accounting information, quality, quantification, managers, consultants

Valuation of Inventories Considering the Fair Value Options

Our paper represents a pleading for fair value in the specific case of valuating inventories. The real significance and implications of fair value can only be seen after analyzing the topic from different points of view concerning all involved actors. Therefore we have based our scientific demarche on analyzing the trade literature and comparing the foresights of international regulations given by both the accounting setting bodies and the valuation setting bodies. Moreover we have followed two of the three moments which require valuation and for these moments we have selected those cases which require the using of fair value. Our opinion regarding the findings of the research is expresses by giving practical examples for the specific application of fair value and the way to reach it.Fair value, inventories, recognition, market value

Aspecte conceptuale si tehnice privind viitoare reglementari contabile pentru IMM-uri in Europa

The economic theories and the accounting regulations deriving from them should be reconsidered for SMEs. At global level, there are accomplishments in this respect – IASB IFRS for SMEs – or intentions – European Commission proposals for certain simplifications of the European directives. However, for these actions to be successful, further investigations concerning the theoretical and technical implications are necessary. In this study, we present our opinion concerning the theoretic influences (reconsideration of the conceptual framework) and the technical influences (change in the disclosure requirements and change in the content of the standards, namely recognition and valuation) implied by a standard for SMEs.SMEs accounting standard, agency theory, shareholder-manager, stakeholders, IFRS for SMEs

Valuation of Inventories Considering the Fair Value Options

Our paper represents a pleading for fair value in the specific case of valuating inventories. The real significance and implications of fair value can only be seen after analyzing the topic from different points of view concerning all involved actors. Therefore we have based our scientific demarche on analyzing the trade literature and comparing the foresights of international regulations given by both the accounting setting bodies and the valuation setting bodies. Moreover we have followed two of the three moments which require valuation and for these moments we have selected those cases which require the using of fair value. Our opinion regarding the findings of the research is expresses by giving practical examples for the specific application of fair value and the way to reach it

Public accounting history in post-communist Romania

Having a longitudinal approach of the Romanian public accounting system’s evolution, this historical study proposes the development of a framework in order to assess in a descriptive manner the change of public accounting and its implications for Romania, a European emerging country. The evolution from cash accounting to accrual accounting took place during three time periods within the timeframe 1991–2015. For each of these time periods we investigated influential factors such as period, place, people, practices, propagation, products, and profession. The study shows that under the influence of the international managerial public reform and the internal factors analysed, the public accounting system shifts from the old values of the post-communist period to new reference bases such as International Public Sector Accounting Standards (IPSAS). The results of the study place Romania, an East European country, on the map of international public sector accounting systems as a relatively new arrival but with serious intentions of integration

Solutii pentru masurarea calitatii informatiei contabile

There are many studies confirming the theory according to which the decisions of the users of the accounting information depend on the quality of this very information, namely its intrinsic quality, as well as its impact through publication. We undertake to test the extent to which the intrinsic quality of the accounting information is assured by the internal means of obtaining the information. The analysis is performed on the Romanian market and takes into account the qualitative characteristics of the accounting information contained within the IASB conceptual framework. We have opted for the data analysis using the technique of the study case and for methods of economic analysis applicable in accounting. After having checked the relevance of the conceptual framework, we have identified the prerequisites, the criteria and, respectively, the measurable quality parameters. We have monitored the influence of these explanatory variables in respect of the topic analysed through the study case, and we have considered the level of quality assurance. The contribution of the study consists of new explicit sub-criteria for the assurance and control of the accounting information, which enrich the accounting theory, and, of an instrument for assessing the quality of the information to be offered to the users, namely managers, but also consultants, who can use it in practice and base their analyses and decisions on it

VALUE ALLOCATION – CONTRIBUTION AND RISK TO THE RELIABILITY OF FINANCIAL REPORTING

Our study argues in favor of the reliability of fair value estimates for correct decision making by the stakeholders of the fi nancial reporting market. The analysis is singularized to emergent contexts, as the Romanian market is the case study, and it is focused on the process of value allocation between the components of a group of assets. Having an application on fi xed assets, the paper shows how fair value estimation is critical and implies risks on such an atypical market. The process of value allocation may bring a high level of arbitrariness to fair value accounting, this being crucial to apply correctly the valuation methodology in relation to the nature of the asset and market information available, and the selection of the allocation keys. The empirics of our study show a consistent expertise of Romanian valuators, as the most frequently used method for value allocation is the deduction of the value of those assets that was estimated based on the market approach, and not the values that were estimated based on the cost or income approach. Other fi ndings show the frequent use of replacement cost, gross or net, to the detriment of book value, a very important aspect for an emergent market, even more so as revaluation in Romania does not guarantee that dedicated valuation methodology was used. These results are all the more important as land and buildings were the majority of fi xed assets valuated, with the highest values as a result of the real estate bubble prior to the fi nancial crisis, and with an essential role in the activity of the companies