Chapter 11 completes the discussion of accounting for property, plant, and equipment and intangible assets by addressing the allocation of the cost of these assets to the periods benefited by their use. Expenditures subsequent to acquisition and impairment are also covered in this chapter.
Asset prices are determined by investors’ risk preferences and by the distributions
of assets’ risky future payments. Economists refer to these two bases
of prices as investor "tastes" and the economy’s "technologies" for generating
asset returns. A satisfactory theory of asset valuation must consider how individuals
allocate their wealth among assets having different future payments.
This chapter explores the development of expected utility theory, the standard
approach for modeling investor choices over risky assets....
In chapter 3, we used dividends as the measure of shareholder cash flow in stock valuation. In chapter 4, we will utilize free cash flow. Whereas dividends are the cash flow actually paid to shareholders, free cash flow (FCF) is the cash flow available to shareholders.
Chapter 11 - Operational assets: Utilization and impairment. This chapter completes our discussion of accounting for operational assets. We address the allocation of the cost of these assets to the periods benefited by their use.
The use of alternative fuels to displace coal reduces reliance on fossil fuels, reduces
emissions of carbon dioxide (CO2) and other pollutants, and contributes to long-term cost
savings for cement plants. Further, due to their high burning temperatures, cement kilns
are well-suited for accepting and efficiently utilizing a wide range of wastes that can
present a disposal challenge.
This report begins with an overview of the types of alternative fuels used in cement kilns,
focusing on energy and environmental considerations.
• Investors are risk-averse individuals who maximize the expected utility of their wealth • Investors are price takers and they have homogeneous expectations about asset returns that have a joint normal distribution (thus market portfolio is efficient) • There exists a risk-free asset such that investors may borrow or lend unlimited amount at a risk-free rate. • The quantities of assets are fixed. Also all assets are marketable and perfectly divisible. • Asset markets are frictionless. Information is costless and simultaneously available to all investors.
A major U.S. interexchange carrier needs to verify the accuracy of
its asset-management database.
As a test, conduct a network and inventory audit on a ”typical”
office in the Midwest.
Utilizing a detailed site-assessment process, ADC found more than
235 discrepancies, including pieces of removed equipment that
were included in the asset-management database. ADC provided a
complete and detailed inventory as well as recommendations to
optimize performance at this site....
The issue of sustainability has a number of dimensions, some of which
were already mentioned. The one addressed here is the sustainability
This issue comes up when the transition of social funds from the emer-
gency or crisis mode to the longer term is examined. The transition is
essentially the change from building a facility to delivering an ongoing
service. By implication, how the services are being used needs to be
monitored and evaluated, not just what was disbursed or built.
As network operators add new capacity, technologies and equipment to their networks, they
often find themselves with older network elements that no longer meet their needs. Additionally,
as some operators grow through acquisition, they sometimes find themselves with duplicated
facilities that add unnecessary capital and operating expenditures. And other operators are faced
with asset disaggregation or divestiture as the result of changing business models.
Zhang (2004) designed a multi-index model to determine the effect of industry, country and
international factors on asset pricing. Byers and Groth (2000) defined the asset pricing process as a
function utility (economic factors) and non-economic (psychic) factors. Clerc and Pfister (2001) posit
that monetary policy is capable of influencing asset prices in the long run. Any change in interest rates
especially unanticipated change affects growth expectations and the rates for discounting investment
future cash flows.
The issuer sells
bonds to capital market investors and the proceeds are deposited in a collateral
account, in which earnings from assets are collected and from which a ﬂoating rate
is payed to the SPV. The sponsor enters into a reinsurance or derivative contract
with the issuer and pays him a premium. The SPV usually gives quarterly coupon
payments to the investors. The premium and the investment bond proceeds that
the SPV received from the collateral are a source of interest or coupons paid to
While the growth in ETF markets is at an early stage in a number of countries, the speed and
breadth of financial innovation in the ETF market has been remarkable in some large financial
systems over the past five years, and has brought new elements of complexity and opacity
into this standardised market. There are a number of disquieting developments in some
market segments which call for closer scrutiny. ETFs have branched out to other asset classes
(fixed-income, credit, emerging markets, commodities) where liquidity is typically thinner
and transparency lower.
Prior to the US Securities Acts contractual uses of accounting ("stewardship") were considered the prime reasons for the calculation of accounting earnings. For example, Leake (1912, pp. 1-2) lists management's requirement to ascertain and distribute earnings according to the differential rights of the various classes of capital and profit sharing schemes as the leading two reasons for calculating earnings (other reasons given by Leake are income taxes and public utility regulation).
This section develops an econometric framework that allows an investor to combine in-
formation in the data with prior beliefs about both pricing and skill. Nonbenchmark assets
allow us to distinguish between pricing and skill, and they supply additional information
about funds' expected returns. In addition, nonbenchmark assets help account for common
variation in funds' returns, making the investment problem feasible using a large universe
A broader but important consideration is whether the audit firm has the relevant industry expertise, as well as the geographical
reach necessary to continue to serve the company, and whether the engagement team effectively utilizes those resources.
Other firm-wide questions include the results of the audit firm’s most recent inspection report by the Public Company
Accounting Oversight Board (PCAOB), including whether the company’s audit had been inspected and, if so, whether the
PCAOB made comments on the quality or results of the audit.
Chapter 7 - Managing operations. After completing this chapter, students will be able to: Explain how operational excellence can lead to competitive advantage; describe different operating strategies managers can pursue; explain the role of operations in an enterprise; outline how the design of production systems and strategies for asset utilization, improving product quality, managing inventory, managing supply chains, and developing products can all improve the efficiency of an organization;…
The idea of using CSAs explicitly to spur the social and eco-
nomic development of children emerged from the conceptual
framework of “asset building.” This perspective was initially
described by Center for Social Development founder Michael
Sherraden in his 1991 book, Assets and the Poor.
the paradigm of asset building has taken shape and become a
widespread theme in social and economic development in the
United States and a number of other countries.
The current liabilities section of the balance sheet contains obligations that are due to be satisfied in
the near term, and includes amounts relating to accounts payable, salaries, utilities, taxes, short-term
loans, and so forth. This casual description is inadequate for all situations, so accountants have
developed a very specific definition to deal with more issues.
as expressed in our mission statement, RREEF Real Estate
seeks to provide our clients with superior long-term returns
while appropriately managing risks to our clients. this goal
directly aligns with our commitment to continuously seek
improvement in the environmental performance of our
assets under management across a variety of value drivers.
being sustainable enhances operating efficiency,
increasingly satisfies investor considerations and
mandates, promotes compliance with growing regulations
and mitigates risks.