We derive equations that allow managers and analysts to quickly forecast percentage change in profit and perform what if analyses without the need to build spreadsheet models or develop pro-forma income statements. The equations specify the relationship between the changes in costs and profit in...

Recent developments have sparked a renewed interest concerning risk related topics in nonfinancial companies. Risk management issues directly touch the domain of management accounting and control. In Germany, topics related to the support of corporate or enterprise risk management are commonly...

The discussion on value-based performance measures is centered around the concept of residual income. 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 congruence between...

In theory, different valuation methods, with consistent assumptions, must give identical results. Numerical examples that purport to illustrate the theory should demonstrate the identical results. Unfortunately, in popular textbooks it is all too easy to find numerical examples that are at odds...

We propose a simple axiomatic system that any depreciation and amortization method - complying with the recent developments in the guidelines set by GAAP and IASB - must obey. The system is consistent with both the matching and the impairment principles. We show that none of the prevalent...

Nonprofit organizations are taxed on the portion of their income that is unrelated to their primary exempt mission. Prior research suggests that nonprofits reallocate expenses from their tax-exempt to their taxable activities in order to reduce their tax liabilities. This paper examines two...

EVA is a performance measure that is being used by an increasing number of companies, but academic research on EVA is limited. In addition, all prior empirical academic studies on EVA have used the firm as the unit of analysis. In this study, we examine the effect of EVA on the performance of...

Although not-for-profit organizations are generally exempted from income taxation, they are subject to tax on profits generated by activities unrelated to their primary exempt purpose. The purpose of the tax on unrelated income is to prevent unfair competition with for-profit entities and to...

The New Zealand (NZ) Government began its public sector reforms in 1984. The purposes of the reforms were to build a more open public sector, a plainer and clearer way of reporting, emphasising accountability and transparency (Wallace, 1993). A central focus of the reforms was to change the...

Empirical researchers in economics, finance and accounting grapple with a fundamental problem of gathering a representative sample of firms to test various theories that abound in the literature. Several well established data vendors provide a wealth of information toward this endeavor. However,...