Exercising professional judgement in an era of sector neutrality : a study of choices made by New Zealand reporting entities
Hooks, Jillian & Tooley, Stuart (2007) Exercising professional judgement in an era of sector neutrality : a study of choices made by New Zealand reporting entities. Financial Reporting, Regulation and Governance, 6(1).
Since 1992, New Zealand has engaged in a sector-neutral approach to accounting standard setting – where a transaction is accounted for based on its underlying economic nature rather than on the type of entity undertaking it. Underpinned by the premise that GAAP can be generalised across the public/private divide, we examine whether systematic differences exist between accounting policies adopted by reporting entities with different ownership and/or operating objectives. We find evidence of sector preference in the choice of useful life for comparable depreciable assets, and differences in policies for the amortisation of goodwill. We also find evidence of sector convergence in the choice of methods for accounting for valuation of non-current assets, deferred taxation and inventory. It is observed that the two accounting policies indicating sector preference have a more direct impact on the Statement of Financial Performance than the other policies examined.
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|Item Type:||Journal Article|
|Additional Information:||The contents of this journal can be freely accessed online via the journal’s web page (see hypertext link).|
|Keywords:||Accounting policy choice, Accrual accounting, Public sector accounting, Sector neutrality|
|Subjects:||Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)|
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School|
Current > Schools > School of Accountancy
|Copyright Owner:||Copyright 2007 School of Accounting, Curtin Business School|
|Deposited On:||27 Feb 2009 12:35|
|Last Modified:||29 Feb 2012 23:42|
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