PROPOSED ACCOUNTING STANDARD REQUIRES CAPITALIZATION OF ALL LONG-TERM LEASES FOR LESSEES

Accounting for leases has been a controversial issue both internationally and in the United States for a number of years. The focus of the issue has been whether or not simply disclosing the amount of lease commitments by the lessee in the notes to the financial statements is adequate financial reporting for long-term leases classified as operating leases. In 2010 the Financial Accounting Standards Board and International Accounting Standards Board jointly issued an exposure draft, Leases (Topic 840), requiring lessees to report an asset and liability for the present value of the committed lease payments or contracts that extend for more than one year. In July 2011, the two boards agreed to re-expose their proposal for this leases standard. A revised proposal was issued in May 2013. This paper examines changes in several balance sheet and income statement ratios by industry and specifically for a grocery store, a merchandiser, and an airline, that will result from the new accounting standard. As expected, ratios involving liabilities change in a direction making the companies appear more risky. In addition, the income statements are revised by imputing interest on the assumed capitalized amount of noncancellable leases and the interest coverage ratios are recalculated. Two companies reporting profits show a decline in the ratio while the airline actually experiences the ratio changing from negative to positive

Extraordinary Item Classification Eliminated from the Income Statement: Some Supportive Evidence

Accounting Standards Update 2015-01 formally eliminated the reporting of extraordinary items in the income statement for fiscal years beginning after December 15, 2015. Gains and losses previously reported as extraordinary items and presented separately below income from continuing operations, are now reported as other gains and losses and included in income from continuing operations. The use of the extraordinary item classification fell sharply after 2002 when gains and losses from the early extinguishment of debt were no longer required to be reported as extraordinary items. By 2003 less than 100 publicly traded firms reported extraordinary items and in 2011 the number was only in the single digits. Finally, in 2013 and 2014 not a single firm in our sample, drawn from the Compustat database, reported an extraordinary item

Change in Reporting the Funded Status of Pensions: Impact on Debt-Asset and Debt-Equity Ratios

In September 2006, the Financial Accounting Standards Board issued a new standard for pensions, referred to when issued as Statement of Financial Accounting Standards No. 158 Employers\u27 Accounting for Defined Benefit Pension and Other Postretirement Plans (FASB 2006) and currently referred to as Accounting Standards Codification (ASC) 715 Compensation—Retirement Benefits, 30 Defined Benefit Plans—Pension, 25 Recognition. The objective of the new standard is to increase understandability of financial statements and improve timeliness and representational faithfulness relating to the funded status of defined benefit pension plans. The results presented in this study demonstrate the impact the new standard has on debt-asset ratios and on debt-equity ratios. Accordingly, the new accounting standard causes some firms to experience a material deterioration in their financial position based on the debt-asset and debt-equity ratios. The new standard provides a more conservative and accurate reporting of the funded status of defined benefit pension plans and therefore more useful information to investors and creditors

Evidence of the Relationship Between Credit Ratings and Reporting Discontinued Operations

ABSTRACT: To test whether standard setters’ objective of improving the usefulness of the financial statements by enacting ASU 2014-08 was achieved, we compare the relationship between credit ratings and discontinued operations under SFAS No. 144 and ASU 2014-08. If discontinued operations are interpreted by credit ratings agencies as non-recurring, they should have no or low persistence and should be unrelated to credit ratings. We find that the relationship between reported discontinued operations and credit ratings under SFAS No. 144 is significant, the implication being that credit ratings agencies did not perceive discontinued operations as non-recurring. In contrast, the relationship is insignificant under ASU 2014-08, discontinued operations are now viewed as non-recurring and the objective of standard setters was achieved. Our results contribute to extant literature on discontinued operations and the relevance of separately stated or disclosed items

The impact of vodcast utilisation upon student learning in the Physiology component of a first year graduate to entry medicine module

The current study sought to determine the effectiveness of video-on-demand podcasts (vodcasts) as a tool for facilitating the understanding of Physiology by first year undergraduate Graduate Entry to Medicine (GEM 1) students. Seventy three GEM 1 students were provided with full length vodcasts of lecture material in advance of each of nine Physiology lectures. Exam performance, using identical sample questions, was assessed against performance of the 2012-2013 GEM 1 class, which did not have access to the vodcasts. Qualitative information on students’ perceptions of the vodcasts was also gathered and analysed. Analysis revealed that the study group of 2013-2014 GEM 1 students achieved significantly higher grades in various examination formats in comparison to the control 2012-2013 GEM 1 cohort. Qualitative analysis of responses to the attitudinal survey revealed that the majority of students liked the vodcasts and that previewing them before lectures did indeed facilitate understanding of the lecture material. However, only 15% of the class was able to view all nine of the prepared vodcasts prior to lectures. Notably, the majority of students indicated that they also considered the vodcasts to be valuable revision tools. This study is the first to show that the use of vodcasts can provide clear, quantifiable benefits for GEM student learning over and above lecture notes and/or lecture slides alone. Our analysis suggests that this improvement was due both to their use as a preview tool as well as facility for later revision of lecture content

First-Class Nonstandard Interpretations by Opening Closures

We motivate and discuss a novel functional programming construct that allows convenient modular run-time nonstandard interpretation via reflection on closure environments. This map-closure construct encompasses both the ability to examine the contents of a closure environment and to construct a new closure with a modified environment. From the user’s perspective, map-closure is a powerful and useful construct that supports such tasks as tracing, security logging, sandboxing, error checking, profiling, code instrumentation and metering, run-time code patching, and resource monitoring. From the implementor’s perspective, map-closure is analogous to call/cc. Just as call/cc is a non-referentiallytransparent mechanism that reifies the continuations that are only implicit in programs written in direct style, map-closure is a nonreferentially- transparent mechanism that reifies the closure environments that are only implicit in higher-order programs. Just as CPS conversion is a non-local but purely syntactic transformation that can eliminate references to call/cc, closure conversion is a non-local but purely syntactic transformation that can eliminate references to map-closure. We show how the combination of map-closure and call/cc can be used to implement set! as a procedure definition and a local macro transformation

Decoupling of Sleep-Dependent Cortical and Hippocampal Interactions in a Neurodevelopmental Model of Schizophrenia

SummaryRhythmic neural network activity patterns are defining features of sleep, but interdependencies between limbic and cortical oscillations at different frequencies and their functional roles have not been fully resolved. This is particularly important given evidence linking abnormal sleep architecture and memory consolidation in psychiatric diseases. Using EEG, local field potential (LFP), and unit recordings in rats, we show that anteroposterior propagation of neocortical slow-waves coordinates timing of hippocampal ripples and prefrontal cortical spindles during NREM sleep. This coordination is selectively disrupted in a rat neurodevelopmental model of schizophrenia: fragmented NREM sleep and impaired slow-wave propagation in the model culminate in deficient ripple-spindle coordination and disrupted spike timing, potentially as a consequence of interneuronal abnormalities reflected by reduced parvalbumin expression. These data further define the interrelationships among slow-wave, spindle, and ripple events, indicating that sleep disturbances may be associated with state-dependent decoupling of hippocampal and cortical circuits in psychiatric diseases