The End of Cost Allocations as We Know Them

Home Builders Association vs. St. Louis County Water Company: A cost allocation case

This chapter provides a unifying survey of the literature devoted to cost-and revenue-allocation problems arising in a variety of optimization models. In general, the need to allocate the cost of operating or constructing a public facility among its users gives rise to a variety of cost-allocation issues. Such issues were considered, for example, by the Tennessee Valley Authority in the 1930s, when the cost of constructing a huge series of multipurpose reservoirs for integrated management of the Tennessee River had to be allocated to three different purposes: navigation, flood control, and power (Straffin and Heaney [66]). Additional examples include the allocation of an airport runway’s construction cost among the different aircraft using it (Littlechild and Thompson [49]), allocating library cost among its users (Bres, Charnes, et al. [4]), cost allocation in cablevision networks (D. Granot and Huberman [33]), and cost allocation in electric power development (Gately [25]). Revenue allocation problems arise whenever the benefits of joint investments have to be fairly allocated among the participants, or in certain bankruptcy problems where an estate has to be divided among the creditors (see, for example, Aumann and Mashler [1]).

ObjetivoA Qual é o impacto da folga de recursos no declínio de grandes empresas brasileiras? Para responder a essa pergunta, testamos hipóteses separadamente para três tipos de folga de recursos: disponível, potencial e recuperável. Essas folgas consistem em recursos além do necessário para manter a organização funcionando.Projeto/metodologia/abordagemDesenvolvemos um estudo empírico quantitativo e longitudinal com dados de empresas brasileiras de 1997 a 2008. Adotamos o método de pares combinados, compondo a amostra de pesquisa com um grupo de empresas de capital aberto que declinaram (43 empresas) e outro que não declinou (40 empresas) no período.ResultadosDescobrimos que a disponibilidade de recursos mais líquidos reduz a possibilidade de declínio. O efeito moderador na folga de recursos potenciais para empresas em indústrias dinâmicas pode mitigar o declínio.OriginalidadeEsta pesquisa contribui para uma melhor compreensão do efeito da folga sobre possíveis recuperações. A extensão dos estudos de folgas de recursos para o contexto de empresas brasileiras mostrou a influência que a folga exerce em um ambiente institucional relativamente menos explorado. Seja financeiro, humano ou tecnológico, a escassez de recursos é mais pronunciada do que em empresas de países desenvolvidos. Esta pesquisa chama a atenção para o fato de que o declínio de empresas brasileiras é analisado sob uma perspectiva mais ampla. Decisões sobre como a empresa usa seus recursos podem afetar positiva ou negativamente o declínio das empresas, reforçando a importância de discutir essa relação.

This book works on the interface between literature, culture, and discourse. It is entirely devoted to the reading of some of Zafzaf’s novels that came out in the early 1970s and in the late 1980s, and attempts to chart the trajectory of the aesthetic imaginary of an exceptional writing experience that marked out the literary and cultural landscape in Morocco and in the Arab world for long. Zafzaf and his writings are associated with aspects of the country's social contradictions, cultural transition, and political transformations, expressed through various aesthetic patterns that translate the crisis of the intellectual within a society weighed down by poverty, political instability, social conflict, and cultural disintegration. Given the relative scarcity of resources that are written in English about the Moroccan novel of Arabic expression, this work is an attempt to theorize and approach in an interdisciplinary manner a set of narratives that have not been previously explored in western academia. Using postcolonial discourse as approach and a metaphor of reading, it draws attention to the often-neglected texts in Moroccan literature of Arabic expression and explores their aesthetic, discursive, and cultural implications that rethink and disturb canonical formations of literary texts in Morocco. This book will be adopted in the now burgeoning fields of the Humanities, and will provide useful resources for courses about Moroccan Literature and culture.

Purpose Agency theory predicts that agents tend to have more information regarding their own talents and efforts than their principals. This information asymmetry enables chief executive officers (CEOs) to “shirk” or engage in actions that benefit themselves at the expense of shareholders. To circumvent this adverse outcome, firms engage in monitoring efforts. One method is monitoring through high-quality accounting information, which can alleviate agency conflicts by reducing information asymmetry. Direct observation of employees’ performance is another monitoring method. This paper examines whether low accounting quality will increase a board’s tendency to use direct observation to alleviate agency conflicts between managers and shareholders. Design/methodology/approach Monitoring through accounting entails evaluating CEO performance on financial performance targets; monitoring through direct observation involves evaluating CEO performance subjectively. This study uses (1) firms utilizing Big Four auditors, abnormal accruals and earnings’ ability to predict future cash flows as proxies for accounting quality and (2) discretionary bonuses paid to CEOs as an indirect measure for a board's direct observation. Findings We find that a board is prone to employ direct observation to reduce agency conflicts that low accounting quality exacerbates. Research limitations/implications Because we obtain CEO compensation data from large public firms, findings in this study might be limited to large firms. Practical implications The findings in this study can be applied to other areas involving agency conflicts. For example, future research can examine a board's use of direct observation to determine the promotion or dismissal of executives if their firm has low accounting quality. Originality/value Our study shows that public firms can still utilize direct observation to mitigate agency conflicts that low-accounting quality aggravates, even though monitoring through accounting is often viewed as a more efficient monitoring mechanism in public firms.

We study how workplace diversity affects how native-born populations form interethnic friendship relations. Drawing on network elasticity research, the relationship between functional and cognitive interdependencies, and intergroup contact theory, we argue that diverse workplaces—because they restrict individuals' opportunities to act on tendencies towards homophily more than other social units—have a particularly strong potential for integration. We test our argument by analysing data from the first round of the European Social Survey with multilevel modelling. In line with expectations, we find that individuals who work at diverse workplaces are more likely than individuals who work at homogenous workplaces to have immigrant friends; that workplace diversity is more efficacious than neighbourhood diversity in generating interethnic friendship relations; and that the association between workplace diversity and the likelihood of having immigrant friends is stronger among individuals who have a low level of education, feel economically vulnerable, and who live in countries characterized by relative resource scarcity.

Over the course of the past few decades, analyses and comparisons of agrarian politics and insurrections have been of central concern within political science, sociology, and related disciplines. Especially in the last ten years, these concerns have been informed and recast in light of theoretical advances and paradigmatic shifts within various academic fields, and as a consequence of tumultuous, realpolitik developments impinging upon or otherwise involving large numbers of peasants. In the case of Southeast Asia, for instance, the most recent decade has witnessed the emergence of substantive challenges to long established models and epistemological assumptions underlying our basic understandings of agrarian rebellion as well as our very discourse on the logic of peasant political strategies and seemingly communalistic traditions. Certain of these challenges range well beyond explicitly political matters and speak to a much broader set of issues. On the one hand, such issues pertain to the characteristic features of peasant economics and exchange, the nature of structural ties linking rural sectors with the world market, and the overall nexus of peasant welfare levels, ideologies, and adaptations in the context of colonial and postcolonial states. On the other hand, and yet clearly related to the foregoing, the questions posed by recent critics of received knowledge bear upon motivation and decision making, particularly in light of cultural perceptions of legitimacy and attitudes toward the taking and sharing of risk. Indeed, what we seem to have is essentially a clarion call for a complete reassessment of peasant responses both to upward shifts in demographic pressure and relative resource scarcity, and more generally, to the large-scale transformation of agrarian relations that is commonly associated with the

We show how shareholder-debtholder agency conflicts interact with strategic reporting under asymmetric information to influence bank regulation. Relative to a benchmark unregulated economy, higher capital requirements mitigate inefficient asset substitution, but potentially exacerbate underinvestment due to debt overhang. The optimal regulatory policy balances distortions created by agency conflicts and asymmetric information while incorporating the social benefit of bank debt. Asymmetric information and strategic reporting only impact regulation for intermediate social debt benefit levels. For lower social debt benefits in this interval, regulatory capital requirements are insensitive to accounting reports, so bank balance sheets need not be marked to market to implement the optimal regulatory policy. For higher social debt benefits, however, capital requirements are sensitive to accounting reports, thereby necessitating mark-to-market accounting to implement bank regulation. Mark-to-market accounting is essential when bank leverage levels are high, and is more likely to be necessary as banks' asset risk or specificity increases.

This research investigates the mediating role of Accounting Information Relevance (AIR) in mitigating Information Asymmetry (IA) through the implementation of Information Technology Governance (ITG) practices within the context of private commercial banks in Iraq. IA is a persistent concern in financial markets and firms, as it can lead to adverse consequences such as agency problems and reduced efficiency. The sample for this research comprises 99 employees from five private commercial banks operating in Iraq, and data analysis is conducted using the Smart PLS. By focusing on the unique setting of Iraq's private banking sector, this research contributes to the existing literature by shedding light on the effectiveness of ITG practices in a transitional economy. The research hypothesizes that the implementation of ITG practices positively influences the reduction of IA within these banks. Moreover, it proposes that AIR serves as a mediating mechanism, whereby the enhanced ITG practices lead to more relevant and timely accounting information, subsequently reducing IA. The findings of this research have implications for both scholars and practitioners in the fields of finance, accounting, and ITG. By examining the mediating role of AIR, this research finds that the combined relationship between ITG, AIR, and IA did not produce statistically meaningful outcomes in our examination. This suggests that the combined impact of these variables might not follow a linear pattern or could be contingent on specific contextual factors. It is possible that further investigation is necessary to elucidate the subtleties of this relationship. Paper type: Research paper

Information Asymmetry and the Ex Ante Impact of Public Disclosure Quality on Price Efficiency and the Cost of Capital: Evidence from a Laboratory Market

Capital market facilitate buying and selling long term securities. There are many parties involved in capital markets include investors, issuers (companies) and regulators. Agency problems arises when there are conflict of interest between the needs of principals (investors) and agents (companies or issuers). This problem is caused by information asymmetry. Financial statements are principal means through which a company communicate its financial information to interested parties. Financial statements have some limitations. Many items (i.e.intangible assets) that have financial value but cannot realibly measure, omitted from financial statements. Therefore, companies need to disclose more information, either financial or non financial informations to investors. Many investors realize that the importance of intangible assets information. There is value relevance of intangible assets such increase in stock market prices, market capitalization or create value for the company.

The demand for cost allocations: The case of incentive contracts versus fixed-price contracts

Indonesia, as an archipelagic nation, faces significant challenges in establishing an efficient food logistics system, particularly in major agricultural centers such as Karo Regency, North Sumatra. This region is recognized as a key producer of vegetables including cabbage, carrots, and tomatoes, contributing strategically to national food security. However, the distribution system has been hindered by extended supply chains, limited infrastructure, and information asymmetry among supply chain actors. This study was conducted to design an optimal distribution network and to evaluate the efficiency of cost allocation using Linear Programming (Minimum Least Cost Allocation) and Distribution Requirements Planning (DRP) methods. Data were collected through field surveys, interviews, and secondary sources from the Central Bureau of Statistics. The findings indicated that the distribution of cabbage and carrots was relatively efficient, while tomatoes experienced significant supply shortages. DRP analysis for the next four periods projected a positive inventory trend, yet declining stock levels highlighted the need for more accurate demand forecasting. Integration of local food systems into national logistics models and the adoption of digital distribution systems were identified as potential solutions. This study is expected to serve as a reference for developing resilient agricultural logistics policies in other regions. Keywords: Food Logistics, Distribution Network, Linear Programming, Distribution Requirements Planning (DRP), Agricultural Supply Chain, Karo Regency.

Allocation of costs together with the charging of fees along to the object of indirect costs or joint costs to the cost biaya. Object imposition to this range of products required for the calculation of the cost of inventories, profit determination and financial reporting. This study aims to allocate shared costs for the combined product CV. Lestari which has resulted in a wide range of bakery products with flavors varying. This shared cost allocation in turn can help companies in menentukkan the cost per unit for each bread. Joint cost allocation method used is the market price method, the method of the average cost per unit, and the weighted average method. Based on the results of the discussion obtained product cost per unit for each type of bread whose value is not much different, it all turned out to be the method used to produce the production cost per unit is higher than its market price of Rp. 800,- except for bakery products rich with the weighted average method which resulted in cost per unit of Rp. 654,-. Keyword: Cost Together.

Kesimpulan kontroversi telah dikemukakan Bazerman et al. (1997) bahwa tidak mungkin bagi auditor untuk menjaga objektivitas kasus kegagalan audit; yang tak terelakkan, bahkan dengan auditor yang paling jujur. Kesimpulan ini didasarkan pada asumsi bahwa auditor adalah pemaksimal utilitas yang diharapkan. Dengan kata lain, ada hubungan antara pemegang saham, manajer dan auditor. Awalnya, auditor diharapkan dapat mengurangi masalah agensi antara pemegang saham dan agen melalui independensi dalam proses audit. Tetapi, untuk beberapa tingkat independensi auditor masih dipertanyakan. Keraguraguan independensi auditor ini adalah karena faktor psikologis yang disebut bias pelayanan mandiri, yang timbul dari interaksi terus-menerus antara auditor dan manajer. Di Indonesia, independensi auditor telah dipertanyakan setelah runtuhnya banyak perusahaan besar yang dilabeli sebagai pendapat Wajar Tanpa Pengecualian pada krisis moneter di tengah 1997-an. Makalah ini bertujuan untuk memberikan penilaian terhadap teori permainan dalam konteks masalah agensi, dan menunjukkan bahwa interaksi strategis antara auditor dan manajer tidak kalah penting untuk menjelaskannya. Dengan menerapkan kerangka teori permainan, penelitian ini menunjukkan bahwa ada bias dalam pelayanan mandiri pada proses audit, tetapi kelompok afiliasi auditor dapat mengurangi bias pelayanan mandiri. Ini menyiratkan bahwa ada masalah agensi antara auditor dan pemegang saham. Masalah ini dapat mengurangi dengan menciptakan dan mengatur kohesi yang kuat dalam tim auditor dan asosiasi akuntan publik.