Goodwill, balance sheet structures and accounting standards Recent developments and issues for French groups.

This article aims to assess the economic issues related to the accounting treatment of goodwill, and more specifically the likely repercussions of the transition to International Financial Reporting Standards (IFRS) on the consolidated accounts of listed companies with effect from 1 January 2005. Based on observations derived from a representative database of French groups, the article demonstrates a marked increase in the amount of goodwill and similar intangible assets in the balance sheets of large groups, and especially of CAC 40 groups, for whom the ratio of such assets to equity reached 82% in 2002. The difficulties experienced in some sectors, especially telecoms and media, led some groups to record substantial write-downs of goodwill and similar intangibles, leading to huge accounting losses being reported in 2001 and 2002. The gearing of these groups, which had risen as a result of external growth strategies partly based on debt financing, then increased further due to the contraction in equity caused by these losses. Hence the observation of a deterioration in balance sheet structure in 2002, extending into 2003. In the light of these observations, can accounting standards yield information that accurately reflects deterioration in a company’s financial structure as early as possible? In view of the rapid developments in recent years described in this article, the question of whether or not to amortise goodwill is no longer a relevant issue. Nevertheless, in a broader perspective, the virtual disappearance of goodwill amortisation that is likely to result from the adoption of IFRS could, in an economic downturn, induce greater volatility in financial statements, at the level of both earnings and equity. This is because downward adjustments of valuations are likely to take the form of one-off charges rather than being spread over time. Notwithstanding this potential additional volatility, the approach recommended by IFRS 3 on business combinations nonetheless gives financial statement users important information about changes in the wealth of a group during an economic downturn, and indicates any loss of that wealth due to over-priced acquisitions. Recognition of goodwill as a separate asset thus has the effect of highlighting the potential fragility of corporate wealth which is based partly on goodwill. Furthermore, it contributes to the general drive towards greater international comparability of accounting standards. However, impairment tests cannot always rely on market prices. There is no guarantee that there will be a deep and liquid market in assets comparable with those that generated the goodwill, and the more specific the asset and the longer the period since acquisition, the more this will apply. It therefore becomes necessary to devise hypotheses, which provide some latitude in the choice of valuations. Moreover, the extent of impairment losses may in itself send out a strong signal, leading to a reappraisal of expectations and share prices. This could trigger a downward spiral, which could only be contained in an efficient market. In the final analysis, the impact of the reform of the accounting treatment of business combinations, and of goodwill arising on such combinations, will largely hinge on how the preparers of financial statements apply IFRS 3, and on the scrutiny brought to bear on the accuracy and meaning of the figures by auditors and analysts. Users will no doubt be able to place more reliance on financial statement preparation and analysis in sectors where only a few large groups have goodwill in their balance sheets, making comparisons between groups easier. Information will be harder to assess where valuations of goodwill and intangibles relate to highly specific or relatively new activities.

Réforme de la centralisation des risques : un nouvel éclairage sur les concours accordés aux petites entreprises.

La réforme de 2006 abaissant le seuil de déclaration des crédits aux entreprises et adaptant la nomenclature, améliore l’information des banques et répond à leur préoccupation de meilleure maîtrise du risque de crédit.Risques, centralisation des risques, crédit, endettement, solvabilité, seuil de recensement, exhaustivité, fiabilité.

Effects of pitch and timing expectancy on musical emotion

Pitch and timing information work hand in hand to create a coherent piece of music; but what happens when this information goes against the norm? Relationships between musical expectancy and emotional responses were investigated in a study conducted with 40 participants: 20 musicians and 20 non-musicians. Participants took part in one of two behavioural paradigms measuring continuous expectancy or emotional responses (arousal and valence) while listening to folk melodies that exhibited either high or low pitch predictability and high or low onset predictability. The causal influence of pitch predictability was investigated in an additional condition where pitch was artificially manipulated and a comparison conducted between original and manipulated forms; the dynamic correlative influence of pitch and timing information and its perception on emotional change during listening was evaluated using cross-sectional time series analysis. The results indicate that pitch and onset predictability are consistent predictors of perceived expectancy and emotional response, with onset carrying more weight than pitch. In addition, musicians and non-musicians do not differ in their responses, possibly due to shared cultural background and knowledge. The results demonstrate in a controlled lab-based setting a precise, quantitative relationship between the predictability of musical structure, expectation and emotional response.Comment: 53 pages, 5 figures; Submitted to Psychomusicolog

Prediction in polyphony: modelling musical auditory scene analysis

PhDHow do we know that a melody is a melody? In other words, how does the human brain extract melody from a polyphonic musical context? This thesis begins with a theoretical presentation of musical auditory scene analysis (ASA) in the context of predictive coding and rule-based approaches and takes methodological and analytical steps to evaluate selected components of a proposed integrated framework for musical ASA, unified by prediction. Predictive coding has been proposed as a grand unifying model of perception, action and cognition and is based on the idea that brains process error to refine models of the world. Existing models of ASA tackle distinct subsets of ASA and are currently unable to integrate all the acoustic and extensive contextual information needed to parse auditory scenes. This thesis proposes a framework capable of integrating all relevant information contributing to the understanding of musical auditory scenes, including auditory features, musical features, attention, expectation and listening experience, and examines a subset of ASA issues – timbre perception in relation to musical training, modelling temporal expectancies, the relative salience of musical parameters and melody extraction – using probabilistic approaches. Using behavioural methods, attention is shown to influence streaming perception based on timbre more than instrumental experience. Using probabilistic methods, information content (IC) for temporal aspects of music as generated by IDyOM (information dynamics of music; Pearce, 2005), are validated and, along with IC for pitch and harmonic aspects of the music, are subsequently linked to perceived complexity but not to salience. Furthermore, based on the hypotheses that a melody is internally coherent and the most complex voice in a piece of polyphonic music, IDyOM has been extended to extract melody from symbolic representations of chorales by J.S. Bach and a selection of string quartets by W.A. Mozart

PVP2006-ICPVT11-93645 CALANDRIA TUBE TO TUBESHEET ROLLER-EXPANDED JOINT QUALIFICATION

ABSTRACT The complex calandria tube to calandria tubesheet roller-expanded joint in CANDU nuclear reactors is usually qualified by test. In this paper, a state-of-the-art numerical simulation is undertaken in order to improve the understanding of the behaviour of the joint to support design modifications and provide assurance that the test rig envelopes behaviour of the in-situ reactor assembly. Parameters such as hoop stress, and plastic deformation of the assembly are predicted. The analysis results are also compared with the available test data and insitu experimental data. The analysis results show that the test performed to qualify the joint using a small plate and single joint is representative of the in-situ reactor configuration