Both the FASB and the IASB do not actively consider information needs of the managementin the process of standard setting. We argue that this focus on external users does not fullyanswer the question as to what constitutes useful accounting information. We analyze thedifferences of managerial...

The discussion on value-based performance measures is centered around the concept of residualincome. The main property of residual income is its connection to capital budgeting and the net-present-value-rule. This property is, however, not sufficient to guarantee strong goal congruencebetween...

The objective of this paper is threefold. First we develop a comprehensive framework for value-relevant disclosures (Value Reporting) to serve as the theoretical background for BusinessReporting in order to give guidance for preparers and standard setters in their task to structure...

With its standards FAS 141 and 142 the Financial Accounting Standard Board has revo-lutionized the accounting for business combinations. One of the major changes is theabolishment of goodwill-amortization, which has been replaced by an annual impairmenttest at the level of a reporting unit....

This pap er presents a general approach to deriving valuation mo dels and the relevant costof capital formulas indep endent of a particular tax environment. The value of a leveredfirm dep ends to a large extent up on the amount and value of the tax shields. The latterin turn differs from...

Purpose – This paper outlines the link between value creation, performance measurement andgoodwill accounting according to IFRS and US-GAAP. Since economic goodwill is identical to thepresent value of future residual income, we examine the question of how accounting informationgathered for...

We analyze the trade-off between the benefits of signaling and the distortions fromopportunistic earnings management resulting from the discretionary capitalization ofResearch & Development (R&D) expenditures. The latter can be used by managers to signalprivate information to the market. It can...

Numerous empirical studies provide evidence on the value relevance of capitalizing expenditures on intangibles such as research & development (Lev and Sougiannis 1996, Hand 2003). However, accounting standards in many countries, such as the U.S. or Germany, prohibit capitalizing these. In this...