European Financial and Accounting Journal, 2017 (vol. 12), issue 3
Articles
Export and Import Functions (Empirical Analysis on the Example of the Czech Republic)
František Obešlo
European Financial and Accounting Journal 2017, 12(3):5-15 | DOI: 10.18267/j.efaj.184 
This paper focuses on import and export of goods of the Czech Republic. The Czech Republic is very open country in European Union. Ratio of import and export of goods and services to GDP is above European Union average. The goal is to find explanatory variables, which have an influence on import and export of goods and to build robust and economically interpretable models. Models are created by cointegration analysis. The advantage of cointegration analysis and error correction models is avoiding spurious regression and differentiation of short-term and long-term relations. There will be used ARDL approach for building models.
The Impact of Corporate Income Tax on R&D of Multinational Entities: An Impact Analysis of Separate Taxation and CCCTB
Hulya Celebi, Sabina Hodžić
European Financial and Accounting Journal 2017, 12(3):17-31 | DOI: 10.18267/j.efaj.185
The significant contribution of R&D to economic development and sustainability has been shown by various studies. Therefore, governments offer different fiscal instruments to attract R&D, especially regarding multinational entities (MNEs). One of the fiscal instruments are tax incentives for R&D. Furthermore, the EU has been working on the switch from Separate Taxation (ST) to Common Consolidated Corporate Tax Base (CCCTB) for longer than a decade, which will lead to harmonized R&D tax allowances, however without harmonizing the tax rates. Hence, this study aims at analyzing how ST and CCCTB impact the location of MNEs' R&D activities,...
Is there a Conflict between Principles-based Standard Setting and Structured Electronic Reporting with XBRL?
Dirk Beerbaum, Maciej Piechocki, Christoph Weber
European Financial and Accounting Journal 2017, 12(3):33-52 | DOI: 10.18267/j.efaj.186
National standard setters and external accounting observers continue to express concerns over a principles-based developed IFRS taxonomy. Considering the anticipated but unexpected SEC decision on March 3rd 2017 to adopt the IFRS taxonomy for electronic filings for Foreign Private Issuers by 2018 and the announcement of ESMA on December 22nd 2016 to base electronic filings in Europe on the IFRS taxonomy by 2020 signal that national regulators, external accounting observers and international regulators have a dissent. This paper reflects the expressed concerns by national standard setters. Applying a scientific approach, a comprehensive literature review...
Fulfillment of IFRS 2 Disclosure Requirements by Companies Listed on the Prague Stock Exchange
Martin Červený
European Financial and Accounting Journal 2017, 12(3):53-64 | DOI: 10.18267/j.efaj.187
The aim of this paper is to assess the quality of share-based payments' disclosure in compliance with IFRS 2 by companies listed on the Prague Stock Exchange. The study shows how companies in the Czech market utilizing share-based payments meet the requirements given by IFRS 2 framework and in order to support the arguments, it compares the results with randomly selected companies from the German DAX index, which represents a well-developed market. The focus is on three key principles of disclosure, as defined by the IFRS 2. As we will demonstrate, Czech corporations do meet the regulatory minimum requirements, but they fail to utilize some of the...
Asset Classification, Subsequent Measurement and Impairment Testing for Carbon Emission Trading
Tharatee Mookdee, Sheila Bellamy
European Financial and Accounting Journal 2017, 12(3):65-86 | DOI: 10.18267/j.efaj.188
With global efforts to combat climate change, accountants from participating entities worldwide need to report the economic value of carbon credits and related assets in carbon markets. However, the absence of formal accounting guidelines allows the selection of accounting practices and reporting methods based on individual judgment. Also, emitters are allowed to invest in carbon credit projects and trading. These circumstances have led to diversity in global accounting practices. As accounting is an international business language in a global business world, it is important to study emerging accounting practices for carbon emission trading. The main...
Own Funds Under Solvency Regime
Pavel Wünsch
European Financial and Accounting Journal 2017, 12(3):87-102 | DOI: 10.18267/j.efaj.189
European legislation for the prudential regulation of insurance and reinsurance sector has existed since the 1970s, gradually materialized in Directive 92/49/EEC and Directive 2002/83/EC, both known as Solvency I. Due to economic and political development the regime become insufficient and therefore in 2009 was adopted the Directive 2009/138/EC known as Solvency II, which represents a crucial modernization of European insurance regulation. Each of these regimes prescribes its own rules for the valuation of assets, liabilities and available capital to cover regulatory solvency requirement. This paper is focused on detection of conditions set up for...
The Impact of Different Determination of Intangible Fixed Assets in Accordance with CAS and IPSAS on Financial Statements
Martin Dvořák, Lukáš Poutník
European Financial and Accounting Journal 2017, 12(3):103-116 | DOI: 10.18267/j.efaj.190
The paper deals with the determination of intangible assets of Czech public sector. On 15 January 2013, the International Public Sector Accounting Standards Board issued new standard IPSAS 31 - Intangible assets. This standard represents a very sophisticated construction of accounting axioms moving public sector much closer to the private sector. The aim of this paper is to identify and make subsequent comparison of methodological elements in the context of intangible assets according to CAS and IPSAS 31. Moreover the paper tries to show the share of intangible fixed assets to the total assets throughout every type of organization of public sector...
How Do Czech Companies Report Fair Value Measurement Under IFRS 13?
Jan Dvořák
European Financial and Accounting Journal 2017, 12(3):117-127 | DOI: 10.18267/j.efaj.191
Although the IFRS 13 standard has been effective for more than 4 years, there is virtually no practical research on this topic. Therefore, this paper focuses on reporting of fair value measurement under IFRS 13 in the Czech Republic. Firstly, the author identifies and describes the theoretical basis of IFRS 13 with a relevant literature review of the conducted research. Subsequently, the actual empirical research is presented on a sample of companies from the Czech Republic. The author reaches a conclusion that in some cases, companies in the Czech Republic fail to report compulsory information, as required by the IFRS 13 standard. Moreover, the empirical...
Importance of Managerial Accounting from High Growth Online Company Valuation Perspective
Jan Pekař
European Financial and Accounting Journal 2017, 12(3):129-144 | DOI: 10.18267/j.efaj.192
Young, high growth internet/online companies are an attractive topic for market analysts and hot shots of Initial Private Offerings. At the same time, it is very complicated to provide a robust valuation for such companies, as shown by often unpredictable paths of share prices, resulting in the dot.com bubble burst in the past. This paper aims to explain why traditional valuation techniques fail to identify the value of a company with a fair degree of probability and tries to identify new metrics reported by managerial accounting that should be included in the valuation procedure. Assuming the condition of technological interchangeability of processes...
Forecasting Stock Market Realized Variance with Echo State Neural Networks
Milan Fičura
European Financial and Accounting Journal 2017, 12(3):145-155 | DOI: 10.18267/j.efaj.193
Echo State Neural Networks (ESN) were applied to forecast the realized variance time series of 19 major stock market indices. Symmetric ESN and asymmetric AESN models were constructed and compared with the benchmark realized variance models HAR and AHAR that approximate the long memory of the realized variance process with a heterogeneous auto-regression. The results show that asymmetric models generally outperform symmetric ones, indicating that a correlation between volatility and returns plays an important role for volatility forecasting. Additionally, models utilizing a logarithmic transformation of the time series achieved generally better results...
Measuring the M&A Value of Control and Synergy in Central and Eastern European Transition Economies with the Case of Avast - AVG Acquisition
David Moreira, Karel Janda
European Financial and Accounting Journal 2017, 12(3):157-169 | DOI: 10.18267/j.efaj.194
We examine the valuation of synergies and control in mergers and acquisitions (M&A) in Central and Eastern European (CEE) transition economies. We determine this value based on comprehensive contemporaneous financial findings extracted from the Thomson Reuters database. Worldwide the market of mergers and acquisitions (M&A) is increasing, reaching in 2016 a value of 6.000 billion EUR globally. Among the CEE transition economies, the M&A total value in the same period was 50 billion EUR. It is widely accepted that between 60% and 80% of M&As are unsuccessful in value creation, so we further research evidences about an alternative framework...
Practical Guideline for the Restructuring of Enterprises Involving Consulting Services (on the Example of Ukrainian Industrial Enterprises)
Anatoliy Kovalyov, Olha Vynokurova
European Financial and Accounting Journal 2017, 12(3):171-189 | DOI: 10.18267/j.efaj.195
The article examines the role of consulting services in the restructuring of enterprises. It describes how consulting firms help to increase the efficiency of enterprises and their value by providing information and recommendations. The work grounds the importance of the restructuring implementation adaptation for enterprises to external market conditions in order to increase their value and improve efficiency, competitiveness and market activity. The authors describe the stages of the restructuring and the participation of a consulting firm at each stage. The work shows the methodology of the restructuring with the involvement of consulting services....
Transparency in Portuguese Local Government: A Study of its Determinants
Nuno Ribeiro, Sónia Nogueira, Ivone Freitas
European Financial and Accounting Journal 2017, 12(3):191-202 | DOI: 10.18267/j.efaj.196
Transparency of public management is fundamental to bringing citizens closer to public managers and as such universally considered an element of good governance.The main aim of this study is to identify the factors determining transparency in public management of Portuguese local authorities. Using the Municipal Transparency Index of 2013 and 2014, socio-demographic, political and economic-financial variables are studied for the population of 308 Portuguese local authorities by the means of testing the previously formulated research hypotheses in the light of the agency theory.The results show that transparency in public management of Portuguese...