Settlement-date Accounting for Equity Share Options – Conceptual Validity and Numerical Effects

This paper shows that settlement-date accounting for equity share options can be seen as an accounting method which implements a shareholder focused residually rewarded partners’ equity view. This equity view represents a simple, natural extension of the shareholder proprietary view. It implicates an equity and income sharing model for accounting which is characterized by specification of both shareholders’ and non-shareholders’ parts of total equity and income. When using this equity and income sharing model, the remeasurements of equity share option obligations made by settlement-date accounting are fully conceptually valid. They represent measurements of one partner group’s share of total equity with effect for another group’s share of total equity and income: the shareholders’ part. Partially, this equity and income sharing model is already the basis for existing accounting standards. It is shown that an intriguing implication of the equity and income sharing model is the fact that treasury shares can hedge present shareholders’ share price risk from the obligation to holders of equity share options. A special hedge accounting construct is needed to account for this hedge effect, and the construct of this model is shown. Numerical simulations are used to illustrate the long run expense effects for shareholders from equity share options by settlement-date accounting both when the expense effects are unhedged and when they are hedged with treasury share holdings. The results demonstrate that the expenses resulting from settlement-date accounting for equity share option awards are significantly higher on average than the expenses resulting from grant-date accounting. And they show that the cost of equity, the share price volatility and the lifetime of the equity share options are important determinants for the size of the differences in total expenses, which in a long run perspective is to be expected from the use of these two alternative accounting models for equity share options. The simulation results demonstrate that hedging with treasury share holdings is very effective to stabilize expenses resulting from options granted to employeesNo keywords;

Immigration and Welfare State Cash Benefits: The Danish Case

The purpose in this paper is to summarize existing evidence on welfare dependence among immigrants in Denmark and to supply new evidence with focus on the most recent years. Focus is on immigrants from non-western countries. The paper contains an overview of the background regarding immigration in recent decades followed by a survey of relevant benefit programmes in the Danish welfare state. Existing studies focus on both macro analyses of the overall impact from immigration on the public sector budget and on micro oriented studies with focus on specific welfare programs. Existing studies focus on the importance for welfare dependence of demographic variables, on the big variation between countries of origin and on the importance of cyclical factors at time of entry and during the first years in the new country. Evidence from the most recent years reinforce the importance of aggregate low unemployment in contrast to fairly small effects found from policy changes intending to influence the economic incentives between welfare and a job for immigrants.immigration, general welfare programs, effects of welfare programs

A model for regional analysis of carbon sequestration and timber production

The greenhouse effect is one of our most severe current environmental problems. Forests make up large ecosystems and can play an important role in mitigating the emissions of CO2, the most important greenhouse gas. Different management regimes affect the ability of forests to sequester carbon. It is important to investigate in what way we best can use forests to mitigate the greenhouse effect. It is also important to study what effect different actions, done to increase carbon sequestration, have on other offsets from forestry, such as the harvest level, the availability of forest biofuel and economic factors. In this study, we present an optimization model for analysis of carbon sequestration in forest biomass and forest products at a local or regional scale. The model consists of an optimizing stand-level simulator, and the solution is found using linear programming. Carbon sequestration was accounted for in terms of carbon price and its value computed as a function of carbon price and the net carbon storage in the forest. The same price was used as a cost for carbon emission originating from deterioration of wood products. We carried out a case study for a 3.2 million hectare boreal forest region in northern Sweden. The result showed that 1.48–2.05 million tonnes of carbon per year was sequestered in the area, depending on what carbon price was used. We conclude that assigning carbon storage a monetary value and removal of carbon in forest products as a cost, increases carbon sequestration in the forest and decreases harvest levels. The effect was largest in areas with low site-quality classes

Stochastic Bioeconomics: A Review of Basic Methods and Results

Basic bioeconomic models which incorporate uncertainty are reviewed to show and compare the principal methods used and results reported in the literature. Beginning with a simple linear control model of stock uncertainty, we proceed to discuss more complex models which explicitly recognize risk preferences, firm and industry behavior, and market price effects. The effects of uncertainty on the results of bioeconomic analysis are rarely unambiguous, and in some instances differ little from corresponding deterministic results. This review is presented to enhance readers' appreciation of the papers to follow in this and the next issue of the journal.Environmental Economics and Policy, International Development, Resource /Energy Economics and Policy, Risk and Uncertainty,

The stable category of Gorenstein flat sheaves on a noetherian scheme

For a semi-separated noetherian scheme, we show that the category of cotorsion Gorenstein flat quasi-coherent sheaves is Frobenius and a natural non-affine analogue of the category of Gorenstein projective modules over a noetherian ring. We show that this coheres perfectly with the work of Murfet and Salarian that identifies the pure derived category of F-totally acyclic complexes of flat quasi-coherent sheaves as the natural non-affine analogue of the homotopy category of totally acyclic complexes of projective modules.Comment: Final version, to appear in Proc. Amer. Math. Soc.; 14 p