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Four Papers on Top Management´s Capital Budgeting and Accounting Choices in Practice
Företagsekonomiska institutionen, Uppsala universitet.ORCID iD: 0000-0002-5043-6289
2012 (English)Doctoral thesis, comprehensive summary (Other academic)
Place, publisher, year, edition, pages
Uppsala: Uppsala universitet, 2012. , 43 p.
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 153
Keyword [en]
Capital budgeting method, cost of capital estimation, accounting choice, goodwill, disclosure compliance
National Category
Business Administration
Identifiers
URN: urn:nbn:se:du-12551Libris ID: oai:DiVA.org:uu-180072OAI: oai:DiVA.org:du-12551DiVA: diva2:623206
Public defence
2012-10-03, Hörsal 2, Kyrkogårdsgatan 10, 753 13 UPPSALA, Uppsala, 16:53 (Swedish)
Opponent
Supervisors
Available from: 2013-05-31 Created: 2013-05-24 Last updated: 2016-02-02Bibliographically approved
List of papers
1. The use of capital budgeting and cost of capital estimation methods in Swedish listed companies
Open this publication in new window or tab >>The use of capital budgeting and cost of capital estimation methods in Swedish listed companies
2012 (English)In: Journal of Applied Business Research, E-ISSN 2157-8834, ISSN 2157-8834, Vol. 28, no 6, 1451-1476 p.Article in journal (Refereed) Published
Abstract [en]

In this paper Swedish listed companies’ use of capital budgeting and cost of capital estimation methods in 2005 and 2008 are examined. The relation between company characteristics and choice of methods is investigated and both within-country longitudinal and cross-country comparisons are made. Larger companies seem to have used capital budgeting methods more frequently than smaller companies. When compared to U.S. and continental European companies, Swedish listed companies employed capital budgeting methods less frequently. In 2005 the most common method for establishing the cost of equity was by asking the investors what return they required. By 2008 CAPM was instead the most utilised method, which could indicate greater sophistication. The use of project risk when evaluating investments also seems to have gained in popularity, while the use of company risk declined. Overall, the use of sophisticated capital budgeting and cost of capital estimation methods seem to be rising and the use of less sophisticated methods declining.

Place, publisher, year, edition, pages
The Clute Institute, 2012
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-12073 (URN)
Available from: 2013-03-27 Created: 2013-03-27 Last updated: 2017-05-31Bibliographically approved
2. What determines the use of capital budgeting methods?: Evidence from Swedish listed companies
Open this publication in new window or tab >>What determines the use of capital budgeting methods?: Evidence from Swedish listed companies
2014 (English)In: Journal of Finance and Economics, ISSN 2328-7284, Vol. 2, no 4, 101-112 p.Article in journal (Refereed) Published
Abstract [en]

Purpose: This paper aims to extend and contribute to prior research on the association between company characteristics and choice of capital budgeting methods (CBMs). Design/methodology/approach: A multivariate regression analysis on questionnaire data from 2005 and 2008 is used to study which factors determine the choice of CBMs in Swedish listed companies. Findings: Our results supported hypotheses that Swedish listed companies have become more sophisticated over the years (or at least less unsophisticated) which indicates a closing of the theory-practice gap; that companies with greater leverage used payback more often; and that companies with stricter debt targets and less management ownership employed accounting rate of return more frequent. Moreover, larger companies used CBMs more often. Originality/value: The paper contributes to prior research within this field by being the first Swedish study to examine the association between use of CBMs and as many as twelve independent variables, including changes over time, by using multivariate regression analysis. The results are compared to a US and a continental European study.

Place, publisher, year, edition, pages
Science and Education Publishing, 2014
Keyword
Capital budgeting, investment appraisal, unsophisticated
National Category
Economics and Business
Research subject
Complex Systems – Microdata Analysis, General Microdata Analysis - others
Identifiers
urn:nbn:se:du-12568 (URN)10.12691/jfe-2-4-1 (DOI)
Note

Open access

Available from: 2013-05-31 Created: 2013-05-31 Last updated: 2016-06-03Bibliographically approved
3. Preparers’ and non-preparers’ lobbying on the proposed prohibition of goodwill amortisation in ED3 ‘business combinations’
Open this publication in new window or tab >>Preparers’ and non-preparers’ lobbying on the proposed prohibition of goodwill amortisation in ED3 ‘business combinations’
2012 (English)In: The Finnish Journal of Business Economics, ISSN 0024-3469, Vol. 63, no 3-4, 30-60 p.Article in journal (Refereed) Published
Abstract [en]

In this paper preparers’ and non-preparers’ positions regarding accounting for goodwill are examined through studying submitted comment letters on ED3 ‘Business Combinations’. Preparers have, because of economic consequences, incentives to lobby for the non-amortisation approach and non-preparers for the amortisation approach. As hypothesised, non-preparers are found to support amortisation of goodwill to a greater extent than do preparers. Moreover, the two groups’ supportive arguments, i.e. how they argue for or against the non-amortisation or amortisation approach, are studied. Again, as hypothesised, the results show that the two groups use the same type of ‘sophisticated’ framework based arguments instead of economic consequences arguments. Taken together the examination of the comment letters thus indicates that both preparers and non-preparers point at conceptual strengths and weaknesses, instead of pointing at the real cause of the lobbying activities, i.e. perceived economic consequences, when they try to affect the final outcome of the standard. These findings confirm earlier research which has suggested that self-interested lobbyists use accounting theories and concepts as useful justifications.

Keyword
Goodwill, Lobbying, Standard setting, Accounting theory, Positive accounting theory
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis, General Microdata Analysis - others
Identifiers
urn:nbn:se:du-12549 (URN)
Available from: 2013-05-24 Created: 2013-05-24 Last updated: 2016-03-01Bibliographically approved
4. Swedish and Dutch listed companies’ compliance with IAS 36 paragraph 134
Open this publication in new window or tab >>Swedish and Dutch listed companies’ compliance with IAS 36 paragraph 134
2015 (English)In: International Journal of Disclosure & Governance, ISSN 1741-3591, E-ISSN 1746-6539, Vol. 12, no 1, 78-105 p.Article in journal (Refereed) Published
Abstract [en]

In the present study, I investigate the extent to which companies listed on the Nasdaq OMX (NOMX) and the Euronext Amsterdam (EA), in their 2005 and 2008 annual reports, complied with the disclosure requirements in IAS 36 paragraph 134, as well as the factors that explain why some companies complied with the standard to a higher extent than did other ones. Swedish and Dutch listed companies are chosen as the accounting oversight system differs between the two countries. The relationship between the dependent variable, that is, information disclosed in accordance with IAS 36 paragraph 134 in the annual reports in Swedish and Dutch listed companies, and the independent variables, that is, accounting oversight, auditing company, size, leverage, future prospects, industry and learning, is examined. The results reveal that Swedish companies listed on the NOMX were more compliant than their Dutch counterparts in 2005, possibly because of the (historically) weak Dutch institutional oversight system. The compliance level seems to have increased in both Swedish and Dutch companies over time, thus indicating learning. In 2008, there was no significant difference in the compliance level between Sweden and the Netherlands, which suggests convergence. Size significantly affected the compliance level in Sweden only, and leverage affected the compliance level in the Netherlands only. Moreover, non-financial companies were more compliant in both countries. The independent variables auditing company and future prospects did not seem to have a significant effect on the compliance level.

Place, publisher, year, edition, pages
Palgrave Macmillan, 2015
Keyword
Disclosure, compliance, IAS 36, accounting choice, enforcement, learning
National Category
Economics and Business
Research subject
Complex Systems – Microdata Analysis, General Microdata Analysis - others
Identifiers
urn:nbn:se:du-12569 (URN)10.1057/jdg.2013.33 (DOI)
Available from: 2013-05-31 Created: 2013-05-31 Last updated: 2017-03-16Bibliographically approved

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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
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  • de-DE
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