/jurnalpengurusan Sat, 08 Oct 2022 10:45:34 +0000 en-US hourly 1 https://wordpress.org/?v=6.9 /jurnalpengurusan/article/fair-value-accounting-and-the-cost-of-equity-capital-of-asian-banks/?utm_source=rss&utm_medium=rss&utm_campaign=fair-value-accounting-and-the-cost-of-equity-capital-of-asian-banks Sat, 08 Oct 2022 10:45:34 +0000 /jurnalpengurusan/?post_type=article&p=2497 The cost of equity is a measure of the required return by investors. It is desirable for firms, especially banks, to lower the cost of equity. There are a number of factors related to the quality of information disclosed that could influence the cost of equity. The accounting regulators aim to improve the quality of information by requiring assets to be valued at fair value. However the application of fair value accounting potentially increases information asymmetry, especially if fair value is estimated and subjected to the judgment of the preparers of financial statements. This asymmetric information problem potentially lowers the information quality and increases investors’ estimation risk and thus influences the cost of equity capital. Therefore, this research investigates the effect of fair value accounting on the cost of equity capital for a sample of Asian banks since banks hold a relatively larger proportion of assets at fair value. Using the generalized method of moment model for dynamic panel data, this research finds significant and positive relationship between assets at fair value and the cost of equity. The results found are similar for both quoted and unquoted assets. Thus although to regulators, fair value accounting provide relevant and timely information to investors, assets at fair value are perceived to be risky and as a consequence investors require higher returns.

]]> /jurnalpengurusan/article/implementation-of-ifrs-13-fair-value-measurement-issues-and-challenges-faced-by-the-islamic-financial-institutions-in-malaysia/?utm_source=rss&utm_medium=rss&utm_campaign=implementation-of-ifrs-13-fair-value-measurement-issues-and-challenges-faced-by-the-islamic-financial-institutions-in-malaysia Fri, 07 Oct 2022 03:10:28 +0000 /jurnalpengurusan/?post_type=article&p=1753 Fair value (FV) is claimed to be superior to other forms of measurement mainly because the former is easily understood by investors and stakeholders. However, the challenges faced in deploying International Financial Reporting Standards (IFRS) 13 FV Measurement could result in inconsistent application and unexpected costs related to the requirements of the standard. As such, this study explored the issues and challenges of implementing IFRS 13 FV Measurement faced by financial instruments, particularly within the context of Islamic Financial Institutions (IFIs). Upon adopting the qualitative approach, in-depth interview sessions were held with several academicians, accountants, auditors, and professional body representatives. The study outcomes revealed that issues in implementation of FV measurement were related to the relevance of measurement and hierarchy of level of FV measurement. Notably, issues pertaining to FV measurement were highlighted from the Shariah perspective. Valuable insights on the issues revolving around IFRS 13 implementation, particularly on financial instruments in Malaysia, are presented in this study.

]]>