Applying assets impairment’s accounting standard and improving the quality of information
Main Article Content
Abstract
The objective of the paper investigates the relationship between the application of assets impairment’s accounting standard and the quality of information disclosed and measures this correlation according to Kanakriyah (2013). We use univariate regression analysis with primary data collected from the survey of 93 financial managers, accountants in enterprises in the VNR500 group in 2019. The results show that the application of this standard significantly improves the characteristics of the quality of information, sorted by the level of diminishing influence, that is the faithfulness, relevance and the comparability. This is very convenient for businesses to access foreign investment capital through the stock market. It also promotes the voluntary adoption of this accounting standards in Vietnam according to the direction of the Ministry of Finance. In addition, the study gives recommendations to adopt this standard easier
Article Details
Keywords
Quality of information, assets write downs, assets impairment, VNR500
References
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Spear, N. A., & Taylor, A. M. (2011). Asset Write‐downs: Evidence from 2001 – 2008. Australian Accounting Review, 21(1), 14-21.
Spence, M. (1978). Job market signaling. In Uncertainty in economics. Academic Press, 281-306. Strong, J. S., & Meyer, J. R. (1987). Asset writedowns: Managerial incentives and security returns.
The Journal of Finance, 42(3), 643-661.
Trương, T. H. D. (2014). Phương hướng và giải pháp vận dụng chuẩn mực kế toán tổn thất tài sản trong các doanh nghiệp Việt Nam. Luận văn Thạc sĩ, Trường Đại học Kinh Tế Thành phố Hồ Chí Minh.
Vo, X. V. (2017). Determinants of capital structure in emerging markets: Evidence from Vietnam.
Research in International Business and Finance, 40, 105-113.
Watts, R. L., & Zimmerman, J. L. (1986). Positive accounting theory. Prentice Hall, Inc.
Xu, W., Anandarajan, A., & Curatola, A. (2011). The value relevance of goodwill impairment.
Research in Accounting Regulation, 23(2), 145-148.
Yang, Z. (2003). The value-relevance of asset write-down regulations in China: The roles of information relevance and measurement reliability. Master of Philosophy, Lingnan University.
Zhang, D. (2019). Top management team characteristics and financial reporting quality. The Accounting Review, 94(5), 349-375.
AbuGhazaleh, N. M., Al-Hares, O. M., & Haddad, A. E. (2012). The value relevance of goodwill impairments: UK evidence. International Journal of Economics and Finance, 4(4), 206-216.
André, P., Dionysiou, D., & Tsalavoutas, I. (2018). Mandated disclosures under IAS 36 Impairment of Assets and IAS 38 Intangible Assets: value relevance and impact on analysts’ forecasts. Applied Economics, 50(7), 707-725.
Bepari, M. K., & Mollik, A. T. (2015). Effect of audit quality and accounting and finance backgrounds of audit committee members on firms’ compliance with IFRS for goodwill impairment testing. Journal of Applied Accounting Research, 16(2), 196-220.
Bộ Tài Chính (2020). Quyết định phê duyệt đề án áp dụng chuẩn mực báo cáo tài chính tại Việt Nam, công bố theo Quyết định số 345/2020/QĐ-BTC, ngày 16 tháng 03 năm 2020 của Bộ trưởng Bộ Tài Chính. Retrieved from https://thuvienphapluat.vn/van-ban/Tai-chinh-nha- nuoc/Quyet-dinh-345-QD-BTC-2020-phe-duyet-De-an-ap-dung-chuan-muc-bao-cao-tai- chinh-tai-Viet-Nam-437190.aspx
Carlin, T. M., & Finch, N. (2009). Discount rates in disarray: Evidence on flawed goodwill impairment testing. Australian Accounting Review, 19(4), 326-336.
Comiskey, E. E., & Mulford, C. W. (2010). Goodwill, triggering events, and impairment accounting. Managerial Finance, 36(9), 746-767.
Chen, A., & Gong, J. J. (2020). The effect of principles-based standards on financial statement comparability: The case of SFAS-142. Advances in Accounting, 49(C), 1-22.
Chen, C. W., Collins, D. W., Kravet, T. D., & Mergenthaler, R. D. (2018). Financial statement comparability and the efficiency of acquisition decisions. Contemporary Accounting Research, 35(1), 164-202.
Dahmash, F. N., Durand, R. B., & Watson, J. (2009). The value relevance and reliability of reported goodwill and identifiable intangible assets. The British Accounting Review, 41(2), 120-137.
Deloitte (2014). History of IAS 36. Retrieved from http://www.iasplus.com/en/standards/ias/ias36
Duangploy, O., Shelton, M., & Omer, K. (2005). The value relevance of goodwill impairment loss: While the market discounts the importance of goodwill amortization, it does not disregard goodwill impairment loss as irrelevant. Bank Accounting & Finance, 18(5), 23-29.
Elsiddig Ahmed, I. (2020). The Qualitative Characteristics of Accounting Information, Earnings Quality, and Islamic Banking Performance: Evidence from the Gulf Banking Sector. International Journal of Financial Studies, 8(2), 1-16.
Filip, A., Jeanjean, T., & Paugam, L. (2015). Using real activities to avoid goodwill impairment losses: Evidence and effect on future performance. Journal of Business Finance & Accounting, 42(3-4), 515-554.
Francis, J., Hanna, J. D., & Vincent, L. (1996). Causes and effects of discretionary asset write-offs.
Journal of Accounting Research, 34, 117-134.
Huikku, J., Mouritsen, J., & Silvola, H. (2017). Relative reliability and the recognisable firm: Calculating goodwill impairment value. Accounting, Organizations and Society, 56, 68-83.
IASB (2001). Framework for the preparation and presentation of financial statements. IFRS. Retrieved March 15, 2014 from http://www.ifrs.org/IFRSs/Documents/ConceptualFramework.pdf.
IASB, E. D. (2010). The conceptual framework for financial reporting. International Accounting Standards Board (IASB).
Jonas, G. J., & Blanchet, J. (2000). Assessing quality of financial reporting. Accounting horizons, 14(3), 353-363.
Kanakriyah, R. (2013). The effect of asset impairment (IAS 36) in improving the quality of accounting information according to users’ perspective: Evidence from Jordan. Doctoral dissertation, Durham University.
Lhaopadchan, S. (2010). Fair value accounting and intangible assets: Goodwill impairment and managerial choice. Journal of Financial Regulation and Compliance, 18(2), 120-130.
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd ed.). New York: McGraw-Hill. Nguyễn, Đ. T. (2012). Phương pháp nghiên cứu khoa học trong kinh doanh. Hà Nội: Nhà xuất bản Lao động – Xã hội.
Phạm, Q. T. (2016). Các nhân tố tác động đến chất lượng thông tin báo cáo tài chính trong các doanh nghiệp tại Việt Nam. Luận án Tiến sĩ, Trường Đại học Kinh tế Thành phố Hồ Chí Minh.
Spear, N. A., & Taylor, A. M. (2011). Asset Write‐downs: Evidence from 2001 – 2008. Australian Accounting Review, 21(1), 14-21.
Spence, M. (1978). Job market signaling. In Uncertainty in economics. Academic Press, 281-306. Strong, J. S., & Meyer, J. R. (1987). Asset writedowns: Managerial incentives and security returns.
The Journal of Finance, 42(3), 643-661.
Trương, T. H. D. (2014). Phương hướng và giải pháp vận dụng chuẩn mực kế toán tổn thất tài sản trong các doanh nghiệp Việt Nam. Luận văn Thạc sĩ, Trường Đại học Kinh Tế Thành phố Hồ Chí Minh.
Vo, X. V. (2017). Determinants of capital structure in emerging markets: Evidence from Vietnam.
Research in International Business and Finance, 40, 105-113.
Watts, R. L., & Zimmerman, J. L. (1986). Positive accounting theory. Prentice Hall, Inc.
Xu, W., Anandarajan, A., & Curatola, A. (2011). The value relevance of goodwill impairment.
Research in Accounting Regulation, 23(2), 145-148.
Yang, Z. (2003). The value-relevance of asset write-down regulations in China: The roles of information relevance and measurement reliability. Master of Philosophy, Lingnan University.
Zhang, D. (2019). Top management team characteristics and financial reporting quality. The Accounting Review, 94(5), 349-375.