Posted 9/20/07
CALL FOR PAPERS
SPECIAL SECTION
EUROPEAN ACCOUNTING REVIEW
ON
MEASUREMENT ISSUES IN FINANCIAL REPORTING
Guest editors:
Katherine Schipper (Duke University -
The Fuqua School of Business)
Marco Trombetta (Instituto de Empresa Business School)
This special section will include research that addresses
the problems and possibilities associated with the need to
resolve pressing measurement issues in financial reporting.
These measurement issues are more timely than ever in light
of recent changes in financial reporting, including the
increasingly widespread adoption of International Financial
Reporting Standards (IFRS), the increasing use of fair
value measurements for financial reporting, including
optional uses (as in IAS 39 and SFAS 159) and the inclusion
of measurement issues as Phase C in the joint International
Accounting Standards Board (IASB) - Financial Accounting
Standards Board (FASB) conceptual framework project.
TOPICS:
Research topics appropriate for this special issue would
include, but not be limited to, the following examples:
1. Characteristics that a given approach to arriving at a
reported or disclosed number must have in order to
qualify as a measurement basis in financial reporting.
a. From a financial reporting standard setting
perspective, what is encompassed by the idea of
"measurement"? Is there a meaningful distinction
between a measurement and a calculated number? For
example, are balance sheet values that are arrived
at by allocations of transaction amounts (such as
the book values of plant, property and equipment)
measurements? Are balance sheet values that are
arrived at by subtracting a forward-looking estimate
from a transaction amount (such as accounts
receivable net of estimated uncollectible accounts
or deferred tax assets net of a valuation allowance)
measurements?
b. To what extent is the standard setting perspective
on measurement compatible with the information
economics approach to accounting theory? Can we talk
about "measurements" and "fair values" in a context
of imperfect and incomplete markets?
2. Implications of choosing and applying a measurement
basis.
a. Should there be one measurement basis for all
balance sheet items? What are the advantage and
disadvantages of the current mixed attribute model
which applies both fair value (and similar)
measurements and measurements based on historical
transaction amounts?
b. Should changes in measurements be asymmetric (as,
for example, in the requirement to measure certain
impaired assets at fair value if that value is less
than book value) or should they be symmetric (as,
for example, in the accounting for trading
securities)?
c. If comprehensive income equals changes in net assets
except for transactions with owners, how should
changes in measurements of assets and liabilities be
displayed in a statement of comprehensive income?
d. How should management intent (as in the current
accounting for marketable securities under IAS 39
and SFAS 115) affect the choice of measurement
basis? To what extent should the choice of
measurement attribute be left in management's hands
(as, for example in the fair value options in IAS 39
and SFAS 159), given that this implies a lack of
comparability?
3. Qualitative characteristics of measurement bases.
a. Which measurement bases are most relevant? Which are
most reliable? Which have the best combination of
these two qualitative characteristics?
b. With regard to potential reliability issues, what
are the most important causes of unreliable
measurements?
c. To what extent can disclosures (in notes to
financial statements) be used to address concerns
about reliability of reported numbers?
4. Reflecting uncertainty about payoffs in measurement,
not recognition. Many financial statement items embody
some amount of uncertainty. Should this uncertainty be
addressed through recognition criteria (as, for
example, in the current version of IAS 37 and in SFAS
or should it be addressed through measurement (as
proposed by the IASB in its exposure draft to amend IAS
37)?
5. Implementation and expertise issues. The adoption of
IFRS by many jurisdictions in recent years has required
preparers and auditors to change accounting
measurements, in some cases, toward a variant of fair
value or current value. Some of these measurements can
require the exercise of professional judgment as well
as significant estimation effort.
a. What are the implementation issues, for preparers
and auditors of financial statements, associated
with this change?
b. What are the implications of this change for the
demands placed on preparer and auditor expertise,
for example, the implications for accounting
education?
c. What, if any, are the implications for financial
statement users?
6. Corporate governance. What is, and what should be, the
relationship between the financial reporting
measurement basis and the corporate governance
structure?
a. Arguably, measurement bases differ in terms of
relevance and reliability (which includes
verifiability). Given these differences, does the
choice of a measurement system affect the liability
of managers that sign a firm's financial reports?
b. Should a law such as the Sarbanes-Oxley Act affect
the standard setter's choice of measurement basis in
authoritative guidance? Should legal considerations
affect management's choice of measurement attribute,
where such choices exist in IFRS and US GAAP (e.g.,
IAS 16 permits but does not require certain
nonfinancial assets to be measured periodically at
fair value; IAS 39 and SFAS 159 permit certain
financial items to be measured at every reporting
date at fair value)?
Following the EAR policy of openness and flexibility
regarding methodologies and styles of conducting research,
papers using analytical approaches (including both
mathematical modeling and qualitative reasoning),
experimentation, field study methods, surveys and
empirical-archival methods will be considered.
PAPER SUBMISSION PROCEDURE:
Submitted papers considered for this special section will
be subject to a double blind review process. Authors are
encouraged to contact the guest editors in advance should
there be any matters on which they require clarification or
guidance:
Email: MAILTO:schipper@duke.edu
or MAILTO:marco.trombetta.ear@ie.edu
Authors should strictly follow EAR submission guidelines
which can be found at:
http://www.tandf.co.uk/journals/authors/rearauth.asp
Submissions in electronic format (MS Word) should be sent to the
EAR editorial office in Madrid (Spain), via e-mail:
Email: MAILTO:ear@ie.edu
The subject of the message containing the electronic
submission should include a reference to "Special Section
on Measurement Issues in Financial Reporting".
Additionally, one hard-copy of the paper should be sent to:
CONTACT: Professor Salvador Carmona, Editor
EAR
Calle Pinar, 15-1B
28006 Madrid (Spain)
The deadline for submissions is 19 September, 2008.
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