The Relationship between Technological Innovation  Activity Based Costing and Business Size

Askarany, Davood; Smith, Malcolm

doi:10.28945/2673

Cited by 12 publications

(17 citation statements)

References 16 publications

(12 reference statements)

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“…To evaluate the investment, a life cycle cost (LCC) approach is frequently applied, as shown by several researchers [1][2][3][4][5][6][7]. In building renovation analyses, approaches aiming to quantify costs considering a single-year period are not suitable, as it is necessary to quantify costs during the total life of the investment, as provided in the LCC approach [8,9]. This approach is relevant for a consideration of discount values in assessments of fundamental importance in capital-intensive sectors, such as real estate.…”

Section: Introductionmentioning

confidence: 99%

Evaluation of Investment in Renovation to Increase the Quality of Buildings: A Specific Discounted Cash Flow (DCF) Approach of Appraisal

Bonazzi

Iotti

2016

Sustainability

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Abstract:The objective of this article is to develop and apply a specific discounting cash flow (DCF) approach to evaluate investment in renovation to improve building quality, thus increasing energy efficiency. In this article, we develop and apply a specific net present value (NPV) and an internal rate of return (IRR) approach to quantify the value created for the owners of the building by the investment in renovation via energy-saving investments that produce positive externalities. The model has an applied interest because, in recent years, a lot of investments in real estate were made by owners in order to increase the green quality of the buildings, and several funds of public aid were provided by the government to stimulate these energy-saving investments. The model proposed here is applied to a case study of a 16-apartment building located in northern Italy considers the model attempts to quantify the initial investment value, the energy savings, the tax deduction of the initial investment and the terminal value of the investment as the increase in building value. The analysis shows that the model is consistent in evaluating investments to improve building quality, and investments within the context of the specific case study considered in the research have IRRs ranging from a minimum of 4.907% to a maximum of 12.980%. It could even be useful to consider a sample of cases to verify whether our results are representative of this specific case study. The model could represent a useful tool for consumers in evaluating their own investments in building renovation, from a stand-alone perspective and even by comparing them with other types of investment. The research could be developed in the future to quantify the social welfare generated by public spending via tax deductions to reduce the costs of investment in energy savings for buildings and could even be applied to new real estate projects in comparing different construction technologies and even comparing the return of renovation investment with other investments not even in the real estate sector.

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Section: Introductionmentioning

confidence: 99%

Evaluation of Investment in Renovation to Increase the Quality of Buildings: A Specific Discounted Cash Flow (DCF) Approach of Appraisal

Bonazzi

Iotti

2016

Sustainability

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“…The current research streams exhibit a wide range of theoretical diversity. Researchers have drawn on disparate disciplines such as economics, organization theory, sociology, social theory, politics, and social anthropology to analyze and synthesize managerial accounting issues (Björnenak and Olson, 1999; Waterhouse and Tiessen, 1978; Yi and Tayles, 2009; Scapens and Bromwich, 2010; Askarany, Smith, and Yazdifar, 2007).…”

mentioning

confidence: 99%

Diffusion of Management Accounting Practices in Gulf Cooperation Council Countries*

Joshi

Bremser

Deshmukh

et al. 2011

Accounting Perspectives

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This study examines how management accounting practices (MAPs) have been adopted and diffused by publicly listed firms in the Gulf Cooperation Council (GCC) countries. The results of our survey show that the adoption rates for MAPs in the area of cost management and strategy are low while those in the area of performance measurement are moderate. Overall, the respondents favorably perceived their success in implementing MAPs. Power and politics, not economic (or cost–benefit) reasons, were considered to be the most influential reasons for nonadoption of MAPs. The results provide partial support to the view that there is a global convergence of management accounting system designs and ideas and also indicate that the role of cultural differences is diminishing over time.

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“…The approach of the cost of production in a single year is not suitable for evaluating the long-term investment and the costs in the long run. In fact, it is necessary to consider the cost of production for the total life of the investment, proceeding according to the technique of ABC (Artto, 1994;Asiedu and Gu, 1998;Askarany and Smith, 2003;Fabrycky and Blanchard, 1991;Tysseland, 2008). It has therefore the importance of applying the ABC approach in the long run with the Life-Cycle Costing (LCC) approach.…”

Section: Methodsmentioning

confidence: 99%

The Application of Life Cycle Cost (Lcc) Approach to Quality Food Production: A Comparative Analysis in the Parma Pdo Ham Sector

Iotti¹,

Bonazzi²

2014

American Journal of Applied Sciences

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In the international literature, the subject of the analysis of the cost of production is often confined to the analysis of short-term convenience. However, the quantification of the cost of production per unit of product has a particular importance in the processing enterprises, especially in the initial phase of choice that concerns realization of investments in facilities and technologies to improve productivity. About this general theme, the research applies the Life-Cycle Cost (LCC) approach to quantify the cost of production in the long-term operation in the processing of pig meat in the Parma PDO ham sector. The research considers not only the analysis of a single good or service such as a plant or a building, which is what frequently appears in LCC application, but also the quantification of the cost of an industrial production, in its whole cycle, during a long-run period. The research applies the LCC approach to a sector with high capital intensity for a typical food production. In the research, the application of the LCC shows that innovative firms that have made investments to improve business efficiency, have lower production cost in the long run; these firms are able to gain efficiency in the production cycle, as result of the investments made to reduce production costs, calculated applying LCC approasch. It then can be stated that the LCC approach represents a useful tool for analysis of convenience-cycle management of companies not only in the short period but even in the long run, particularly those operating in sectors with high capital intensity and with a long payback period of investments in fixed capital, as considered in the research. Moreover, it could be useful to deep the analysis applying the suggested LCC approach to a larger sample, even in other sector, to verify the usefulness of the LCC application in quantifying whole life cost.

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The Relationship between Technological Innovation Activity Based Costing and Business Size

Cited by 12 publications

References 16 publications

Evaluation of Investment in Renovation to Increase the Quality of Buildings: A Specific Discounted Cash Flow (DCF) Approach of Appraisal

Evaluation of Investment in Renovation to Increase the Quality of Buildings: A Specific Discounted Cash Flow (DCF) Approach of Appraisal

Diffusion of Management Accounting Practices in Gulf Cooperation Council Countries*

The Application of Life Cycle Cost (Lcc) Approach to Quality Food Production: A Comparative Analysis in the Parma Pdo Ham Sector

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