Pub Date : 2003-03-01DOI: 10.1108/09657960310698182
David Shaw
Risk adjusted performance measurement can be a difficult and expensive goal to get right or improve even with everyone supportive within the institution. If this measurement is combined with existing profitability performance measurement and elements of traditional ALM, both hopefully already well established, the goal of simultaneously measurement and management of risk and profitability/performance can be achieved.
{"title":"Risk adjusted performance measures and capital allocation","authors":"David Shaw","doi":"10.1108/09657960310698182","DOIUrl":"https://doi.org/10.1108/09657960310698182","url":null,"abstract":"Risk adjusted performance measurement can be a difficult and expensive goal to get right or improve even with everyone supportive within the institution. If this measurement is combined with existing profitability performance measurement and elements of traditional ALM, both hopefully already well established, the goal of simultaneously measurement and management of risk and profitability/performance can be achieved.","PeriodicalId":299727,"journal":{"name":"Balance Sheet","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116495552","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2003-03-01DOI: 10.1108/09657960310698173
A. Lennard
This is an extract from an exploratory essay on liabilities and how to account for them written by Andrew Lennard, Director of Operations at the Accounting Standards Board in London. It deals with the objective of financial statements and users’ needs in that context and then provides some overall conclusions.
{"title":"Liabilities and how to account for them","authors":"A. Lennard","doi":"10.1108/09657960310698173","DOIUrl":"https://doi.org/10.1108/09657960310698173","url":null,"abstract":"This is an extract from an exploratory essay on liabilities and how to account for them written by Andrew Lennard, Director of Operations at the Accounting Standards Board in London. It deals with the objective of financial statements and users’ needs in that context and then provides some overall conclusions.","PeriodicalId":299727,"journal":{"name":"Balance Sheet","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115830341","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2003-03-01DOI: 10.1108/09657960310698191
P. Fell, M. Devine
Over the next few years the regulation of financial services companies by the Financial Services Authority in the UK will move to a single system of risk‐based supervision. The authors provide a guide to how firms should approach and implement this process which is contained in what is known as the Integrated Prudential Sourcebook. They also point to the eventual benefits of such a system.
{"title":"The FSA Integrated Prudential Sourcebook – a walk through","authors":"P. Fell, M. Devine","doi":"10.1108/09657960310698191","DOIUrl":"https://doi.org/10.1108/09657960310698191","url":null,"abstract":"Over the next few years the regulation of financial services companies by the Financial Services Authority in the UK will move to a single system of risk‐based supervision. The authors provide a guide to how firms should approach and implement this process which is contained in what is known as the Integrated Prudential Sourcebook. They also point to the eventual benefits of such a system.","PeriodicalId":299727,"journal":{"name":"Balance Sheet","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121367877","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2003-03-01DOI: 10.1108/09657960310476863
N. Gerrard
UK companies face an increasingly aggressive regulatory environment. A recent study by the LSE shows that UK directors are ill‐equipped to deal with increasing regulatory risk. While they are aware of these growing risks, almost a third of boards do not know about the activities in their companies that could lead to a regulatory intervention. Less than one in five are “very confident” in their risk management processes. UK companies also fail to effectively monitor and influence new regulations. Businesses need to adopt a proactive approach to handling these risks, acting at all stages of the regulatory cycle. By doing so, they can afford themselves a competitive advantage, and reduce the chances of facing severe corporate and personal penalties.
{"title":"Rethinking regulatory risk: a strategy for the UK and global corporate governance","authors":"N. Gerrard","doi":"10.1108/09657960310476863","DOIUrl":"https://doi.org/10.1108/09657960310476863","url":null,"abstract":"UK companies face an increasingly aggressive regulatory environment. A recent study by the LSE shows that UK directors are ill‐equipped to deal with increasing regulatory risk. While they are aware of these growing risks, almost a third of boards do not know about the activities in their companies that could lead to a regulatory intervention. Less than one in five are “very confident” in their risk management processes. UK companies also fail to effectively monitor and influence new regulations. Businesses need to adopt a proactive approach to handling these risks, acting at all stages of the regulatory cycle. By doing so, they can afford themselves a competitive advantage, and reduce the chances of facing severe corporate and personal penalties.","PeriodicalId":299727,"journal":{"name":"Balance Sheet","volume":"244 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117020341","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2003-03-01DOI: 10.1108/BS.2003.26511AAB.001
B. Robinson
{"title":"Why investing in the year 2003 may be different","authors":"B. Robinson","doi":"10.1108/BS.2003.26511AAB.001","DOIUrl":"https://doi.org/10.1108/BS.2003.26511AAB.001","url":null,"abstract":"","PeriodicalId":299727,"journal":{"name":"Balance Sheet","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134560575","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2003-03-01DOI: 10.1108/09657960310467836
D. Damant
The author analyses the recent history of financial reporting and shows that its complexities are inevitable. He sets out the basis for a fair value model stemming from a conceptual framework and argues that if financial reporting rules are to be correctly drawn from such a framework the resulting reports will be complex and require well‐trained professional analysis to both understand them and to explain them.
{"title":"Accounting standards – a new era","authors":"D. Damant","doi":"10.1108/09657960310467836","DOIUrl":"https://doi.org/10.1108/09657960310467836","url":null,"abstract":"The author analyses the recent history of financial reporting and shows that its complexities are inevitable. He sets out the basis for a fair value model stemming from a conceptual framework and argues that if financial reporting rules are to be correctly drawn from such a framework the resulting reports will be complex and require well‐trained professional analysis to both understand them and to explain them.","PeriodicalId":299727,"journal":{"name":"Balance Sheet","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114832414","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2002-12-01DOI: 10.1108/09657960210450754
Richard J. Fairchild
Considers whether financial risk management is value‐adding. Although risk management can reduce total risk, this may not affect the cost of capital or firm value. Well‐diversified investors have already eliminated all of the specific risk, and risk‐management may be seen as a zero NPV activity at best, and at worst, a value‐reducing activity. However, there is a role for risk management. Reduction of total risk may reduce the expected costs of financial distress, hence increasing expected cashflows. This increases firm value. Presents a method of investment appraisal that takes account of total risk through expected financial distress costs. Such a method can result in three possible decisions relating to a new project; reject the project invest in the project; and risk‐manage; or invest in the project but do not risk‐manage. Finally, presents worked examples.
{"title":"Financial risk management:is it a value-adding activity?","authors":"Richard J. Fairchild","doi":"10.1108/09657960210450754","DOIUrl":"https://doi.org/10.1108/09657960210450754","url":null,"abstract":"Considers whether financial risk management is value‐adding. Although risk management can reduce total risk, this may not affect the cost of capital or firm value. Well‐diversified investors have already eliminated all of the specific risk, and risk‐management may be seen as a zero NPV activity at best, and at worst, a value‐reducing activity. However, there is a role for risk management. Reduction of total risk may reduce the expected costs of financial distress, hence increasing expected cashflows. This increases firm value. Presents a method of investment appraisal that takes account of total risk through expected financial distress costs. Such a method can result in three possible decisions relating to a new project; reject the project invest in the project; and risk‐manage; or invest in the project but do not risk‐manage. Finally, presents worked examples.","PeriodicalId":299727,"journal":{"name":"Balance Sheet","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129673255","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2002-12-01DOI: 10.1108/09657960210450736
Andreas Krause
It is shown that the widely used risk measures standard deviation and value at risk do not always reflect risk preferences accurately. To overcome these problems in risk measurement a class of coherent risk measures has been proposed. We introduce the idea behind these measures and provide an overview of suggested coherent risk measures. Finally it is shown where the limitations of such measures in practical applications are and how regulatory bodies responded to their introduction in the literature. We find that most contributions on coherent risk measurement come from the actuarial sciences and propagate a widening of the discussion among researchers and practitioners in other industries.
{"title":"Coherent risk measurement: an introduction","authors":"Andreas Krause","doi":"10.1108/09657960210450736","DOIUrl":"https://doi.org/10.1108/09657960210450736","url":null,"abstract":"It is shown that the widely used risk measures standard deviation and value at risk do not always reflect risk preferences accurately. To overcome these problems in risk measurement a class of coherent risk measures has been proposed. We introduce the idea behind these measures and provide an overview of suggested coherent risk measures. Finally it is shown where the limitations of such measures in practical applications are and how regulatory bodies responded to their introduction in the literature. We find that most contributions on coherent risk measurement come from the actuarial sciences and propagate a widening of the discussion among researchers and practitioners in other industries.","PeriodicalId":299727,"journal":{"name":"Balance Sheet","volume":"2012 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127384024","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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