We analyzed the problem of optimal risk sharing in a new joint venture, in a two-entity framework, where the new venture's products are sold in a competitive market environment. The two parties to the joint venture each have pre-existing risky projects, and the profit potential of the new venture is random. Risk is driven by Brownian motion processes; there is no debt, and the two entities act cooperatively. In this setting, optimal risk-sharing can be determined ex-ante, with a sure expectation of no ex-post negotiation, and the resulting solution will be stable. We found the square root sharing rule can be optimal and depends on the risk preferences of the venture partners, the time horizon of the joint venture, and the complementarity and substitutability of the new venture cash flow...
For any financial report to be meaningful, the entity whose economic activities are being reported must be clearly identified. Because the reporting entity concept is so fundamental to financial reporting, standards such as US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) contain guidance on identifying entities for which financial statements should be prepared. In conjunction with their ongoing efforts to converge US GAAP and IFRS at the standard level, the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are developing a common conceptual framework that will be the foundation of future converged standards. On Mar 11, 2010, the Boards reached a key milestone in their joint con...
The American limited liability company (LLC) is like an incorporated partnership. The LLC allows private business owners to form a company that provides protection from personal liability for business debts, without incurring a second level of corporate federal income tax on the business entity's earnings. A blended theoretical model for LLC governance is advanced that recognizes the important role that the law plays in shaping expectations of trustworthy behavior. The Mandatory Core Model permits contractual innovation within the framework of a mandatory core of minimum statutory fiduciary duties. The Mandatory Core Model creates the framework within which courts can enforce LLC operating agreements while also addressing abusive investor conduct. A purely contractarian paradigm presupp...
The US has adopted a more laissez-faire approach to privacy protection. Over the last several years, there has been a dramatic increase in the incidents of identity theft and high-profile data security breaches -- many involving accountants, tax preparers, and auditors. This article uses the AICPA's definition of "privacy" as the rights and obligations of individuals and organizations with respect to the collection, use, retention, and disclosure of personal information. Viewed in this context, CPAs need to comply with a host of information privacy laws, regulations, and rules. Page 7 of Generally Accepted Privacy Principles, issued by the AICPA/CICA, lists 10 "Generally Accepted Privacy Principles" and provides objective, measurable criteria against which accountants audit each of the ...
... care clearinghouse" is a public or private entity that processes health information into a standard ... Privacy Principles: A Global Privacy Framework." Most companies are not legally required to maint...
....4 and 39.4 of this chapter, a registered entity may request that the Commission approve a new or d... rule fits into the registered entity's framework of self-regulation, a demonstration that the submi...
In September 2010, the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) completed the first phase of a project that will influence global standards setting for many years to come. Having a conceptual framework eliminates the need for a standards setter, such as the FASB or the IASB, to reestablish core concepts each time it develops or updates a standard. Additionally, by consistently referring to a stable conceptual framework, a standards setter is more likely to promulgate standards that are consistent with each other as well as with significant assumptions and constraints. The conceptual framework of US Generally Accepted Accounting Principles is documented in a series of Statements of Financial Accounting Concepts issued by the F...
...C. Measurement. D. Reporting entity. E. Presentation and disclosure, including financi...
WASHINGTON, March 18 /PRNewswire-USNewswire/ -- The latest statements made by Congresswoman Ileana Ros-Lehtinen (R-FL) member of the U.S. House Foreign Affairs Committee attacking the integrity of the imminent elections in Sudan are misguided and worrisome. The United States was among the guarantors of the agreement responsible for ushering in this era of peace in Sudan, and hence should retain intimate knowledge of the peace process. The groundless concerns expressed by the congresswoman and those who share her sentiments appear only to be a pretext used by the anti-democratic- transformation forces to perpetuate their campaign of obscuring peace for Sudan. In promptly responding to these uninformed remarks, it is important to reiterate that the vision and a cornerstone of the Comprehe...
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