The role of non-controlling interests in the value relevance of consolidated financial statements

Sotti, Francesco

doi:10.22495/cocv15i1c2p12

Cited by 3 publications

(2 citation statements)

References 29 publications

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“…Although the first approach is less complex, the second approach would still have an impact on the analytical value of the consolidated financial statements, not only from the perspective of minority shareholders but also with regard to the information needs of financial analysts. In other words, the existence of NCIs and their adequate accounting treatment is an important determinant of the value relevance of consolidated financial statements (Sotti, 2017).…”

Section: Elimination Of Internal Results From Ending Inventory -Full ...mentioning

confidence: 99%

“…The key challenges of consolidated financial reporting since the beginning of the 21st century are largely a consequence of changes in accounting standards. More recently, research has been predominantly focused on the new concept of control and its implications on consolidated financial statements (Hsu, Duh & Cheng, 2012;Ben-Shahar, Sulganik & Tsang, 2016;Beck et al, 2017;Bedford, Bugeja & Ma, 2022), goodwill accounting (André, Filip & Paugam, 2016;Li & Sloan, 2017;Amel-Zadeh, Glaum & Sellhorn, 2023;Just, Honold & Meckl, 2023), including other intangible assets acquired in a business combination (Skinner, 2008;Su & Wells, 2018;Tunyi et al, 2020;Barker et al, 2022), accounting treatment of non-controlling interests (Lopes, Lourenço & Soliman, 2013;Welc, 2017;Sotti, 2017;Lopes et al, 2021) and other specific reporting areas in accordance with the acquisition method.…”

Section: Introductionmentioning

confidence: 99%

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Some Challenges in the Consolidation of Unrealized Intra-Group Profits and Losses

Sekerez,

Spasić

2023

FU Econ Org

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Procedures for eliminating internal results in practice may vary due to the different nature of the relationship between related parties, but also due to the vagueness of the accounting regulation, which opens up space for alternative procedures in practice. The ways of eliminating internal profits and losses differ primarily depending on whether full consolidation of financial statements or one-line consolidation, followed by the application of the equity method, is performed. At the same time, with both mentioned consolidation procedures, questions are raised regarding whether downstream and upstream transactions should have the same treatment, that is, whether the total internal result should be eliminated or only its part that is proportional to the ownership share. The aim of this paper consists in analyzing specific issues of eliminating internal results, while considering the current state and the possibility of improving accounting regulations in that field.

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Section: Elimination Of Internal Results From Ending Inventory -Full ...mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Some Challenges in the Consolidation of Unrealized Intra-Group Profits and Losses

Sekerez,

Spasić

2023

FU Econ Org

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Examination of the convergence route to IFRS reporting and disclosure

Iyer

Chakravarthy

2022

CGSR

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Value relevance (VR) of earnings and book value of equity is studied in a setting where the International Financial Reporting Standards (IFRS) have been adopted through a convergence and customization route. Quantile regression methodology is applied to level and return models. We find no significant increase in VR of earnings or book equity. Smaller firms show some sensitivity to the change in the regime as compared to the largest set of firms, though accounting metrics overall, help explain the value of larger firms better. We conclude that the convergence route leads to continuous, incremental benefits over the pre-adoption period which pre-empts any significant increase in VR upon IFRS adoption. Gradual convergence with IFRS supported by positive, investor-friendly changes (Roca, 2021) to existing institutional and regulatory frameworks over time, results in better adoption and early, continuous capture of value, though the process itself is long drawn out. More research is needed to test the relevance of alternate metrics in the current technology and intangibles-driven economies (Barth, Li, & McClure, 2021). India’s unique approach to IFRS adoption may hold lessons for all IFRS adopters across the world while responding to new/revised standards in the future. This is the first comprehensive study on the value relevance and information content of the Indian Accounting Standards (Ind AS)

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The concept of a ratio analysis of consolidated financial statements applied to listed capital groups on the example of the Deutsche Börse Group

Karmañska¹,

Wiśniewska²

2020

ZTR

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Purpose: The article concerns the ratio analysis of consolidated financial statements. The aim is to en-courage and conduct a discussion about its specifics and usefulness. Methodology/approach: The concept of ratio analysis of consolidated reporting created by Karmańska in 1999 (and later verified) is presented. The advantages of this analytical method were illustrated on the example of the corporate group of the German stock exchange operator. Findings: The concept has shown its usefulness in identifying aspects of business activity that are specif-ic for capital groups. The authors recommend its usage either fully or to a limited extent, depending on the area of analysis where functioning in a capital group matters and can enrich the reasoning. Research limitations/implications: This article does not present the results of direct empirical studies conducted using the proposed analytical approach but is oriented on a specific aspect of business activity assessment. It is aimed at a wider community of academics and practitioners verifying the proposed analytical concept. Originality/value: The article concentrates on the specifics of consolidated financial statement analysis, which has, until now, been present in the literature only to a limited extent. Moreover, this is the first work where a detailed financial analysis of a stock exchange operator was performed.

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The role of non-controlling interests in the value relevance of consolidated financial statements

Cited by 3 publications

References 29 publications

Some Challenges in the Consolidation of Unrealized Intra-Group Profits and Losses

Some Challenges in the Consolidation of Unrealized Intra-Group Profits and Losses

Examination of the convergence route to IFRS reporting and disclosure

The concept of a ratio analysis of consolidated financial statements applied to listed capital groups on the example of the Deutsche Börse Group

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