<p>In 2005, all groups listed on European stock exchanges are required to prepare their consolidated financial statements according to International Financial Reporting Standards (IFRS). IFRS are different from local regulations across Europe in many aspects, and observers expect the transition process thorny and resource-draining for the companies that undertake it.</p><p>The study explores transition difficulties by Swedish bank groups on the way of implementing IAS 39, Financial Instruments: Recognition and Measurement. Deemed the most controversial and challenging standard for adoption by the financial sector, it indeed poses new demandson classification, recognition and measurment of financial instruments, and sets out new hedge accounting rules, previously unseen in Swedish practice. Additionaly, the structure of bank's balance sheets makes IAS 39 also the central one among all other standards in terms of numbers of balance sheet items it impacts.</p><p>The study uses qualitative method to explore whether transition to IAS 39 is likely to improve transparency in reporting derivatives. Focus is on use of interest rate swaps as hedging instruments in mitigation of interest rate risk.</p><p>It is concluded that differences between two reporting frameworks have been well understood by the banks early in the implementation process. A negative feature of the standard is increased volatility in earnings as a result of more wide-spread reliance on fair value measurement method. This accounting volatility impedes comparability of performance results, as well as conceals true efficiency of economic hedge relationships. To some degree, the volatility can be minimized by the application of hedge accounting. However, a bank must methodically follow a set of rigourous if hegde accounting is to be adopted. Fair value is a more straightforward alternative to hedge accounting , but it brings in additional concerns, and has not yet been endorsed in the EU.</p><p>It is additionally argued that recognition of all derivatives on BS and measurement at fair value are two important features of IAS 39 that indeed increases reporting transparency by minimizing risk of undisclosed hidden losses.</p>

In this study, I examine the influence of construals (interpretations) and mindsets on professional skepticism in auditors. Auditors have been criticized lately for not displaying enough professional skepticism, particularly in their audits of complex estimates (PCAOB 2008). Regulators speculate about and academic research shows a correlation between low professional skepticism and both audit failures and audit malpractice claims (Beasley et al. 2001; Anderson and Wolfe 2002). I hypothesize that prolonging the deliberative mindset in the audit judgment and decision-making process can increase professional skepticism in auditors. Experienced auditors take part in a 1 x 3 between-participants experiment in which they play the role of a senior auditor charged with evaluating a client's fair value estimate. I manipulate the type of mindset (deliberative or implemental) invoked by the evidence documentation instructions and have a third condition in which participants do not have to document audit evidence. Using multiple measures of professional skepticism, I find that auditors in the deliberative mindset condition display higher professional skepticism than both auditors in the implemental mindset condition and auditors in the no documentation condition. I further analyze the types of textual responses entered by the auditors and offer direction for future research in this area.

In this study, we look at the effects of the adoption of the revised IAS 1 rules, which has been in effect since January 1, 2009. The revised IAS 1 requires that all changes in equity, excluding changes in equity arising from transactions with owners, should be recognized in comprehensive income statement. Revised IAS 1 requires companies to report total comprehensive income that is a sum of net income and other comprehensive income. Total comprehensive income includes all unrealized gains and losses recognized under IFRS. Before the amendment, some of the unrealized gains and losses were shown in a statement of changes in equity but not in the income statement. We hope to answer the question whether inclusion of the components of other comprehensive income provides investors with useful information. We investigate if stock prices have an association with the components of other comprehensive income. We investigate how effective are attempts of IASB to increase the relevance of accounting information about corporate income. We hope that results from the study will be of interest to the standard-setter. In this study, we use data from annual reports and year-end reports for companies listed on the Large and Mid Cap segment at NASDAQ OMX Stockholm and that covers the years 2009 to 2011. We use two regression models to test value relevance of components of other comprehensive income.We have found some evidence that the share price statistically relates to such component of comprehensive income as the change of the fair value of cash flow hedges. This can also be interpreted as that the change of the fair value of cash flow hedges has some value relevance. We also found some evidence that the share price significantly associates with winning cash flow hedging position. We did not find that the share price associates with some other components of other comprehensive income.

This paper explains what recognition the auditor has of theoretical judgment and decision making subjects surrounding the audit process. The auditors’ judgment and decision making skills seem to be more challenged when it comes to estimating their clients’ valuations. Therefore, the audit process of fair value measures (FVM) is used to charterer the recognition more clearly. Attention to this topic is warranted for several reasons. First, FVM was implemented on the Swedish market in 2005 and is relatively recent to Swedish auditors. Second, to our knowledge no similar study, regarding the Swedish audit firms, has been conducted within this area. Third, the evidence, drawn from previous research, of what recognition the auditors have of the theoretical judgment and decision making subjects seem to be more indirect than direct and we also extend the previous research. We find, through semi-structured interviews with employees of the ‘Big four’, that both judgment and decision making are acknowledged as possible issues. However, we also find that certain areas within these two categories are unrecognized to be of immediate concern.

År 2005 infördes standarden IAS 40 som ger svenska börsnoterade förvaltningsfastighetsbolag möjligheten att redovisa sina fastigheter till verkligt värde. Verkligt värde har kritiserats på grund av det bygger på subjektiva bedömningar och det kan leda till en missvisande redovisning som kan få negativa konsekvenser för intressenter. 1 januari 2013 infördes den nya standarden IFRS 13 för att ställa ytterligare upplysningskrav gällande värdering av tillgångar till verkligt värde. Denna studie behandlar hur värdering till verkligt värde påverkar intressenters informationsbehov, deras uppfattning av fastighetsvärdering till verkligt värde och resonemang kring införandet av IFRS 13. Syftet med undersökningen var att förklara för hur olika intressenters behov av redovisningsinformation påverkas vid värdering av förvaltningsfastigheter till verkligt värde. För att uppnå studiens syfte har en kvalitativ metod använts där djupgående intervjuer genomförts. Respondenterna valdes ut med utgångspunkt i att de ska erhålla kunskap och erfarenhet av börsnoterade förvaltningsfastighetsbolag. Studiens respondenter är investerare, kreditgivare och finansanalytiker eftersom samtliga påverkas främst av värdering till verkligt värde av förvaltningsfastigheter. Studien har visat att olika intressenter i och med sin yrkesidentitet fokuserar på olika delar av värderingsinformation om verkligt värde. Intressenter drivs av rimlighet snarare än precision och anser därför de att det är viktigare att bolagen redovisar bakomliggande antaganden än det verkliga värdet. Intressenter skapar sig två uppfattningar av fastigheters verkliga värde, en positiv och en negativ. De anser att verkligt värde fungerar bra vid en hög marknadsaktivitet då många fastigheter köps och säljs, tvärtom uppfattar intressenter att finns stora brister med verkligt värde vid låg marknadsaktivitet. Intressenter misstror även att det redovisade verkliga värdet är marknadsvärde eftersom att fastigheter ofta säljs för ett annat pris än det redovisade. Studien visar att införandet av det nya regelverket ger en ökad uppfyllelse av intressenters informationsbehov, men att det blir en avvägning mellan relevans och mängd i värderingsinformationen för att deras behov av ska uppfyllas. / In 2005 the standard IAS 40 was introduced which provides Swedish listed companies with investment properties the opportunity to evaluate their properties at fair value. Fair value has been criticized because it is based on subjective assumptions that can lead to inaccurate financial reports and negative consequences for stakeholders. January 1st 2013 the new standard IFRS 13 was introduced which requires increased disclosures of valuation at fair value. This study examines how fair value affects stakeholders information needs, their perception of property valuation at fair value and reasoning about the implementation of IFRS 13.                                       The aim of the study was to explain how different stakeholders information needs are affected by the valuation of investment properties at fair value. To achieve the purpose of the study a qualitative method was used and in-depth interviews have been conducted. Respondents were selected on the basis that they would obtain the knowledge and experience of listed companies with investment properties. The study's respondents are investors, creditors and financial analysts because they are primarily affected by the valuation measurement at fair value of investment properties. The study has shown that different stakeholders in their professional identity focuses on different aspects of the valuation information about fair value. Stakeholders are driven by plausibility rather than accuracy, therefore they think it is more important that companies report underlying assumptions than the actual fair value. Stakeholders creates two different perceptions of the properties fair value, one positive and one negative. They believe that fair value function well at a high level of market activity when several properties are purchased and sold, on the contrary stakeholders perceive there are large gaps with fair value at low market activity. Stakeholders distrusts the reported fair value is the market value, since the properties often are sold for a different price than the reported. The study shows that the introduction of the new standard provides a greater fulfilment of stakeholders information needs, but it is required that there is a balance between relevance and quantity of information if their needs will be satisfied.

Bakgrund: IFRS 13 behandlar värdering och upplysningskrav för värdering till verkligt värde som är en marknadsbaserad värdering. Banksektorn är en verksamhet som får tydliga konsekvenser med svårigheterna att värdera sina finansiella tillgångar till verkligt värde. En finansiell tillgång som bankerna har är utlåning till allmänheten. Mindre banker får fler förfrågningar om lån med hög risk och för att undvika en felbedömning av utlåningen bör en riskbedömning göras. Om en bank gör denna riskbedömning felaktigt kan bankerna få en förlust och förlora eget kapital. Syfte: Syftet med arbetet är att granska skillnaderna mellan några mindre bankers värdering till verkligt värde av posten utlåning till allmänheten. Syftet är dessutom att belysa både problem och möjligheter med bankernas riskhantering för både banksektorn och externa parter. Metod: Undersökningen har baserats på en kvalitativ metod med fyra stycken personliga intervjuer samt två telefonintervjuer med ekonomiansvarige på mindre banker. En telefonintervju genomfördes även med en revisor för att få mer förståelse över lagverket och få en revisors syn på värdering till verkligt värde. Slutsats: Bankerna hanterar värderingen med tanke på risken genom att försöka säkra lånen så mycket som möjligt. Bankerna hanterar risken mellan företagslån och konsumentlån på samma sätt. Bankerna ser dock en större risk med företagslån därför att dessa lån inte har någon säkerhet. Säkerhet och återbetalningsförmåga är A och O för bankerna när det gäller riskhantering av utlåningen. Bankerna värderar allmänhetens utlåning till verkligt värde på två olika sätt. Två av bankerna värderar posten utlåning till allmänheten korrekt enligt IAS 39 medan fyra banker inte gör denna värdering. Anledningen till dessa skillnader är att det finns en tydlig tolkningskonflikt på vad som är verkligt värde. Detta påvisar att det är problematiskt för mindre banker att tilllämpa regelverket och detta kan leda till att de mindre bankerna vänder sig till större banker för att få hjälp. På så vis kommer bankerna eventuellt bli institutionaliserade med tiden. / Background: IFRS 13 deals with the valuation and the disclosure requirements of fair value valuation, which is a market-based value. The banking sector is an organization that gets clear implications with the difficulties to value their financial assets to fair value. One financial asset that banks have is their lending, a loan portfolio. Small banks get more requests of loans with high risk and to avoid a misjudgment of the loan portfolio, they should do a risk assessment. If one bank does this risk assessment incorrectly it could put the bank in a worse scenario and lose equity. Purpose: The purpose with the study is to examine the differences between some small banks valuation to fair value of loans to the public. The purpose is also to illustrate problems and opportunities with the banks risk assessments to the bank sector and to external parts. Methods: The investigation has been based on a qualitative method with four personal interviews and two telephone interviews with the financial managers in smaller banks. One telephone interview was also carried out with an accountant to get more understanding over the rules and regulations and to get an accountants approach to fair value. Conclusion: With the risk in mind, the banks are dealing with the valuation by ensuring the loans as much as possible. There is no difference in treating the risk whether it’s a loan to a business or a consumer. However, the banks are seeing greater risk with loans given to a business because they don’t have any security. Security and the ability to return loans is everything for the banks when it comes to dealing with the risks of lending. Loans to the public are by the banks valued to fair value in two ways. Two of the banks value their loans to the public correctly according to IAS 39, while four banks don’t use this way of valuation. The reason for these differences is the clear interpretation conflict on what fair value really is. This points to the complication for smaller banks to apply these rules and that they will turn to larger banks for help. This is how the banks possibly are to become institutionalized over time.

The game of football has transformed from just being a game into a huge economic market attracting investors from all over the world. As clubs spend more and more money on player acquisitions, player registrations (considered intangible assets) now represent a significant part of the total assets of major European football clubs. Due to this, treatment of player registrations has become a significant accounting issue. The purpose is to analyze and compare from the perspective of an investor, how a sample of European football clubs account and disclose values of player registrations. The purpose aim to answer the questions how and what kind of information each club discloses on their financial statements. Also, are current accounting procedures and disclosure harmonized, and do they present a true and fair view of top European clubs financial status. A descriptive case study was the most appropriate as it aims to answer the questions “how” and “why”. A sample selection filter was set in the beginning of the process together with the research questions. The final sample was set to be: Arsenal FC, Manchester United, Borussia Dortmund, Juventus FC and FC Porto. The purpose of the selection filter was to get a study both fair on economical as well as competitive sports level. Primary data consist of information from annual financial reports, and in order to enhance validity, interviews with professionals have been conducted and used.  Findings show similarities as well as differences in disclosure and treatment of football player registrations. All clubs meet the minimum requirements from IAS 38 and UEFA. However, how and what kind of information each clubs disclose differ substantially and due to lack of valuation models and the possibility to capitalize home-grown players and free agents, the value of player registrations is not presented in a true and fair view.

[Truncated abstract] Following the introduction in 1999 of Australian Accounting Standard Board (AASB) 1041: 'Revaluations of Non-Current Assets' (Australian Accounting Standards Board 2001a), this study set out to examine the impact of the introduction of this new standard on: the number (percentage) of Australian firms revaluing various classes and submajor classes of non-current assets; and the value relevance and reliability of the information provided with respect to various sub-major classes of non-current assets. The study also set out to examine the apparent motivations for Australian companies electing the fair value (FV) basis, rather than the historic cost (HC) basis, for reporting property, plant and equipment (PP&E). The sample analysed in this study consisted of Australian Stock Exchange (ASX) listed firms that were included in each of the Connect4, Aspect Financial and Core Research Data (CRD) databases. After excluding firms not covered by all three databases and firms where there were missing data problems, 398 and 424 firms were left in the 1999 and 2002 samples, respectively. Of the 398 and 424 firms, there were 194 firms that were common to both sample periods and a separate analysis of these 'common' firms allowed a 'like-for-like' comparison to be made. The financial year ending June 30, 1999 provides data under the previous standard AASB 1010 (Australian Accounting Standards Board 2000) before the introduction of AASB 1041, while the financial year ending 30 June 2002 provides data under AASB 1041 (the new standard). ... At the disaggregated level (that is, for various sub-major classes of non-current assets), it appears that there was a decline in the number (percentage) of firms choosing to revalue investment property, property, and plant and equipment, while there was no change in the number (percentage) of firms choosing to revalue listed or unlisted investments. It appears that AASB 1041's requirement to revalue frequently when the FV basis was adopted discouraged firms from choosing the FV basis for some asset classes, presumably because the costs associated with frequent revaluations outweighed the perceived benefits. In terms of value relevance, the results suggest that where the variables of interest are scaled there was no improvement in the value relevance of the information provided by Australian companies following the introduction of AASB 1041. However, the results from the unscaled regressions do not support this conclusion and instead suggest that the introduction of AASB 1041 was associated with an overall improvement in the value relevance of the information provided with respect to the various sub-major classes of non-current assets investigated in this study. Resolution of this conflicting result is beyond the scope of this dissertation and is an issue worthy of future research. In terms of reliability, the results suggest that the introduction of AASB 1041 was generally associated with: an improvement in the reliability of information reported with respect to non-current assets reported at FV; and a deterioration in the reliability of information reported with respect to non-current assets reported at HC. Finally, with respect to the potential motivations behind a company's choice of the FV basis for reporting PP&E, the results suggest that firms are motivated to revalue PP&E to: improve their borrowing capacity; for signalling purposes; and to reduce information asymmetry.

Nürnberg, Universiẗat, Diss., 2006--Erlangen. / Literaturverz.

Univ., Diss.--St. Gallen, 2007.