Cost or Fair Value Model? Determinants of Accounting Choice for Investment Property
| Autor: | Chung-Hao Cheng, 鄭忠昊 |
|---|---|
| Rok vydání: | 2011 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 99 Financial Supervisory Commission held an announcement to all listed companies that they should compile financial reports with IFRS from 2013, and allowed voluntary early adoption in 2012, stated on May 14, 2009. In the past, most of literature used to focus on the influence of accounting information quality and market response before and after adopting IFRS. For the reason that IFRS is principle-based standard, managers have more autonomy to choose accounting measurement method. As a result, the paper has limited knowledge of the role that economic motives of accounting choice plays in investment property valuation. After the adoption of IFRS, the company will be in accordance with IFRS No.1 and IAS No. 40 specifications, investment property accounting measurement will be recognized for the first time in the selection and follow-up measure of the accounting method choosing, the choice of fair value model or cost model to be recognized. This paper focuses on the theory of accounting choice and the related costs of fair value measures of investment property, explores which factors affect the accounting choice for investment property using multinominal logit model. IFRS is an international accounting standard, so we use international studies to show a more comprehensive and stable test. The sample comprises 179 firms from eight major countries—England, France, Germany, Hong Kong, Singapore, Spain, Australia, Finland and Italy— the 2005-2010 period. The result shows that lowly market-to-book ratio and civil-law based firms have an incentive to select cost model. However, the higher market-to-book ratio, the larger size of the company, the fair value numbers come from the independent reviewer and common-law based firms, which prefer to use fair value model as measurement of investment property. It means that companies use fair value model for investment property consider not only the related cost of fair value but also expected to provide a relevant and reliability accounting information. Besides, in additional tests also found that past operating performance and future litigation risks also affect the choice of investment property accounting methods. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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