Czech Financial and Accounting Journal, 2008 (vol. 2008), issue 2

Jak na interdisciplinaritu?

Bohumil Král, Jaroslav Wagner

Český finanční a účetní časopis 2008(2):4-6 | DOI: 10.18267/j.cfuc.264  

Capitalized Net Income and Residual Earnings as an Alternative of Discounted Cash Flow?

Miloš Mařík, Pavla Maříková

Český finanční a účetní časopis 2008(2):7-20 | DOI: 10.18267/j.cfuc.265  

Both our and foreign practice prefer the discounted cash flow method for business valuation. The article analyses some relations between the discounted cash flow method and other income methods based not on cash flows but on earnings. Especially the economic value added method and the capitalized net income method belong among such methods. One of main surveyed relations between income methods is a fact that investments are captured in discounted cash flow method through expenditures while in methods based on earnings through cost of capital necessary for these investments. The article also researches relations between earnings and paid dividends within...

Usual Errors Evaluation of Investment Projects with Discounted Cash Flow Method

Josef Valach

Český finanční a účetní časopis 2008(2):21-30 | DOI: 10.18267/j.cfuc.266  

Investment appraisal methods by using of discounted cash flow have been more often applied to firm's projects evaluation in developed countries and also in Czech Republic. However at their application in practice various errors are often observed which unfavorably influence on quality of projects evaluation. Wrong proceedings appear especially at quantification of cash flow from project and at a selection of required rate of return. Capital expenditures are often considered in a strict sense, only in form of investment costs recorded in accounting. They do not include various further expenditures connected with investments and necessary for complex...

HML and SMB Premiums in the Recent Scholar Literature - Magnitude and Nature

Tomáš Buus

Český finanční a účetní časopis 2008(2):31-41 | DOI: 10.18267/j.cfuc.267  

This paper deals with the nature and height of HML and SMB premiums from the point of view of recent literature on these topics. We can say that although this theme is quite new, it attracted appropriate attention and many authors have proved statistically existence of these premiums. However the question is still about their nature, respectively whether in the case of HML it is not false causality rather than premium. Even though several authors find narrow relationship between risk and HML premium, opinions form a wide range and the discussion still goes on. We consider implied cost of capital being interesting methodological instrument for looking...

Three major types of the financial decision making in enterprise

Marie Míková

Český finanční a účetní časopis 2008(2):42-46 | DOI: 10.18267/j.cfuc.268  

The paper describes three major types of financial decision making in an enterprise: (a) decision on investment areas, (b) decision on investment financing, (c) decision on profit distribution. All three types of decision are interlinked and must reflect the most important objectives of an enterprise. Return on assets and investment risks related to the assets must be also taken in account during decision making.

Economic Records Antiquity States

Michal Hora

Český finanční a účetní časopis 2008(2):47-53 | DOI: 10.18267/j.cfuc.269  

This article proposes a way of historical progress of accounting records. Infancy dates back to the earliest days of human agriculture and civilization, the Sumerians in Mesopotamia an another civilization, when the need to maintain accurate records of the quantities and relative values of agricultural products first arose. Accounting records developed purely in response to the needs of the time brought about by changes in the environment and societal demands. The view to the history helps explain the phenomenal growth that the profession of accounting records has enjoyed worldwide since the first form of record was born. How and why did this relatively...

Valuation of Insurance Contracts

Jiřina Bokšová

Český finanční a účetní časopis 2008(2):54-61 | DOI: 10.18267/j.cfuc.270  

IFRS 4 - Insurance Contracts - does not cover the issue of valuation of insurance assets and liabilities. A complex solution is shifted to the II phase of the IFRS 4 standard, especially in the field of valuating, which should be based on fair value of insurance contract files. Currently is prepared a new material for discussion to the professional public, which will become a basis for the new proposal of IFRS 4 standard - Insurance Contracts - II phase. The article outlines possible attitudes of IASB to valuation of insurance contracts.

Conceptual Changes in Accounting for Business Combination

Jiří Pelák

Český finanční a účetní časopis 2008(2):62-72 | DOI: 10.18267/j.cfuc.271  

This article deals with changes and trends brought by IFRS 3 (revised 2008). However, the aim is not to describe all changes in their detail, rather the objective is to explain what is behind the changes and how to interpret new provisions in light of the evolution of accounting for business combinations. The major changes are illustrated by examples related to measurement of goodwill and resulting impacts which are rather complex in case of business combinations achieved in stages.

Is the Sarbanes-Oxley Act the Right Therapy?

Dana Kovanicová

Český finanční a účetní časopis 2008(2):73-77 | DOI: 10.18267/j.cfuc.272  

As a reaction on bankruptcy and financial scandals of the important international corporations, the Congress U.S.A. issued in 2002 a new law - Sarbanes-Oxley Act. The important part of it deals with the regulation of auditor profession by means of a new established institution - PCAOB. This paper is a disputation with an opinion that this institution could contribute significantly to rectification. The right reason dwells in generally accepted shareholder theory, which economists and managers consider as only legit and scientific. But this theory is not neutral as it has a powerful ideological background and undesirable economical and social subsequences....

The Competitive Advantage of Management Accounting

Jana Fibírová

Český finanční a účetní časopis 2008(2):78-90 | DOI: 10.18267/j.cfuc.273  

ABC and BSC methods enable to better manage the company set the strategy and use effective motivational instruments for its implementation. ABC method represents significant development in recognition of causality of cost origin. However, it doesn't change basic theoretical findings in behaviour of supply (costs) and demand curve. The simplified cost distinguishing between variable and fixed suggested by economic theory has become a thing of the past in the managerial accounting since late 60ties, i.e. much sooner before ABC method has been developed. Divergence of content focus of economic theory and applied disciplines shouldn't be used for comparison...

Accounting Profit/Loss and Tax Base

Libuše Müllerová

Český finanční a účetní časopis 2008(2):91-95 | DOI: 10.18267/j.cfuc.274  

The question of what would happen to the discounted tax burden of Austrian enterprises if IFRS were used as the relevant basis for taxation has been tested in three scenarios. Research has shown, that the effect on the discounted tax burden is small, and could be arguing that IFRS prove to be a suitable basis for taxation. In spite of this conclusion the authors do not support this view. However the experience from the Czech Republic shows great differences between profit according to IFRS and according to the Czech Accounting Rules. IFRS are not only unsuitable for taxation, but tax base determination would be independent on any accounting rules.