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代写essay-物业租赁市场行为与会计准则综述

时间:2017-02-12 12:46来源:www.ukassignment.org 作者:cinq 点击:
物业租赁市场行为与会计准则综述
Summary of behaviors and accounting principles in the property leasing markets
 
本研究的目的是突出和研究现行会计原则的一些缺点或缺陷。在这份报告中2个方面,可以影响资产负债表,并可能提供夸大或超过规定的盈利价值。本报告中讨论包括两个主题;
 
Table of Contents
 
1Introduction
2Literature Review
2.1Paper 1
2.1.1Title
2.1.2Aim
2.1.3Methodology
2.1.4Results
2.2Paper 2
2.2.1Title
2.2.2Aim
2.2.3Methodology
2.2.4Results
2.3Paper 3
2.3.1Title
2.3.2Aim
2.3.3Methodology
2.3.4Results
3Conclusion
4References
 
1 Introduction 简介
The purpose of this study is to highlight and examine some shortcomings or flaws of the prevailing accounting principles. In this report 2 areas that can impact the balance sheet and may offer an exaggerated or over stated value of the earnings. The two topics that are discussed in this report include;
 
Accounting for diluted EPS
Accounting for leasing
Both topics are important and relevant to shareholders. The importance of diluted earnings per share and how employee stock options and the prevailing treasury method to calculate the consequences of dilutive outstanding options systematically belittles and devalues the dilutive effect of stock options, and by this means exaggerates or increases the worth of the reported EPS
 
Diluted earnings per share (diluted EPS) is basically a calculation of company earnings based on the all shares of a public company when considering that all the securities (bank notes, futures options and all convertible assets) were renewed into company shares and floated as outstanding. Diluted EPS is important for shareholders because this would give them the worst case scenario about the earning made per share.
 
In leasing arrangements, the financing is done using off-balance sheet financing principles, therefore leasing transactions do not give a full picture of the business story hence they increase the risk factor. The flaws of lease account can even hamper the company in the long run though they offer a much rosy picture in the short run. The flaws of lease accounting also keep the shareholders in the dark.
 
To study these two domains, three research papers were studied, these included;
 
2 Literature Review 文献综述
2.1 Paper 1
2.1.1 Aim
The purpose of the paper is to calculate the Diluted Earnings per share using treasury stock method. This paper explores and checks whether including unrecognized employee compensation in proceeds from the assumed exercise of employee stock options under the treasury stock method is appropriate.
 
The pair also aims to show that both FASB and IFRS follow the same accounting principles for the calculation of diluted EPS.
 
Another objective of the paper is to elucidate that when treasury stock method are included in the employee stock options, factors like unrecognized future compensation of employees is also considered that impacts and the diluted EPS calculation.
 
2.1.2 Methodology
A simple multi-period model (4 years period is taken for the study) is developed using some assumptions that include;
 
There is no risk
There are no dividend
There are no taxes
The rate of return is constant and risk free at 10%
For stock based compensation, accrual basis amounts are considered
The book value of the firm is 22 million
There are 10 million outstand shares
Market value is $ 22
Each year one million is handed out as compensation
Cash Payments
Debt Issue
Stock Transfer
Stock Option Grants
If all options hold economic equivalence, then the exact value of EPS is acknowledged. It is also suggested to regularly monitor the EPS despite which ever method of employee compensation was used.
 
Basically, the Earning Per Share (EPS) is estimated through three different scenarios:
 
Cash Compensation
Debt Issuance Compensation
Stock Transfer Scenarios
We can see that the EPS under various scenarios are almost same for each option available. This is an indication that GAAP is suitable and appropriate for accounting of cash, compensation, debt compensation and stock transfer compensation.
 
2.1.3 Results
The model calculates EPS using three alternate options;
 
Cash Compensation
Debt Issuance Compensation
Stock Issuance Compensation
The results indicate that if all the assumptions of the multi-period model are true and followed, the study discovers that all three substitute options available that includes the option of cash imbursement versus debt issuance versus common stock transfer versus stock option compensation circumstances and consequences have an equal or same EPS value
 
The study also recommends that just if the employee stock options are being considered, diluted EPS should be calculated considering the following;
 
1) Employee compensation is appropriately treated as an annuity – incurred periodically over time,
 
2) Shares purchased for the treasury are assumed acquired at the higher year-end price, and
 
3) The proceeds from assumed stock option exercise should not include unrecognized compensation.
 
2.2 Paper 2
2.2.1 Title
2.2.2 Aim
The use of employee stock options has increased over the years by companies and statistics indicate that from within 10 years the number of employee stocks has doubled. In the case selected also, within 3 years the value of outstanding shares increased from 5.3% to 6.1%. The increase in the outstanding shares is directly related to the denominator of EPS ( EPS = Earnings) and regulators need to be considered as diluted stock impact the corporate performance.
 
The main objective of this paper is to show with empirical evidence that the prevailing method that is FASB treasury-stock method of accounting to calculate the consequences of dilutive outstanding options systematically belittles and devalues the dilutive effect of stock options, and by this means exaggerates or increases the worth of the reported EPS.
 
2.2.3 Methodology
The study uses not only theoretical modelling but also empirical evidences. The data used in the paper was collected from four different sources;
 
The largest set of data available was from the first option of 1059 businesses. If any of the information about these businesses was missing from K-10 reports, CRSP data or Compusat data, the firm was dropped out of the final sample. Extreme cases that accounted for 1% of the remainder were also excluded out of the sample.
 
The final sample on which the conceptual model was tested empirically included consists of 731 firms and 1,787 firm-years of observations for fiscal years 1995 to 1997
 
The study covers the following tests for the collected data to reach a conclusion
 
The hypothesis for the study was: “Understated stock option dilution in FASB-diluted EPS downwardly biases estimates of the stock-return response to FASB-diluted EPS changes “
 
2.2.4 Results
The study concludes that the economic dilution from options in our proposed measure of options-diluted EPS is, on average, 100% greater than dilution in reported diluted EPS using the FASB treasury-stock method.
 
The study examine the implications of our analysis for stock price valuation, the price-earnings relation, and the return-earnings relation. The study also demonstrate analytically that when firms have options outstanding, empirical applications of equity valuation models that use reported per share earnings as an input, yield upwardly 731ed estimates of the market value of common stock.
 
The results of the study were mixed results.
 
Another support in favor of the hypothesis was found when the researchers rank firms on option intensity, but the hypothesis was not endorsed when the researchers rank on other substitutes for determinants of the ERC
 
2.3 Paper 3
2.3.1 Title
2.3.2 Aim
The purpose of this study is to express an opinion regarding the need for proposed changes in the accounting for leases. The study offers a summary of behaviors and accounting principles in the property leasing markets.
 
The paper highlights the short comings of the principles of accounting when it comes to leasing, the author asserts that these shortcomings or flaws in the procedure to document leasing transactions do not give a full picture of the business story hence they increase the risk factor. The flaws of lease account can even hamper the company in the long run though they offer a much rosy picture in the short run. The flaws of lease accounting also keep the shareholders in the dark.


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