Jones Enterprises Real Estate Investment Trust: Comparing U.S. and Canadian Acquisition Accounting, Balance Sheet and Security Commission Reporting, and Initial Public Offering Location

2018 ◽  
Vol 33 (2) ◽  
pp. 35-42
Author(s):  
Natalie Tatiana Churyk ◽  
Alan Reinstein ◽  
Lance Smith
Keyword(s):  
Real Estate ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Balance Sheet ◽  
Accounting Students ◽  
Real Estate Investment ◽  
Generally Accepted Accounting Principles ◽  
Balance Sheets ◽  
Advantages And Disadvantages ◽  
Public Offering

ABSTRACT Based on a Big 4 real estate audit partner's client, this case introduces graduate research and advanced financial accounting students to acquisition accounting under U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS), provides a perspective on real estate investment trusts (REITs), and requires analyzing a U.S. versus Canadian (Ontario) initial public offering (IPO). Students list U.S. and Canadian advantages and disadvantages of REITs, record a portfolio purchase, prepare U.S. GAAP and IFRS balance sheets in order to grasp major REIT reporting differences, contrast the key provisions between U.S. and Canadian (Ontario) securities commissions' IPO reporting, and consider ongoing securities commissions' reporting options. Finally, students will recommend whether the IPO should be issued in the U.S. or Canada. Completing the case helps students: (1) grasp U.S. GAAP and IFRS acquisition accounting methods and different REIT presentations; and (2) recognize that the country selected for the IPO depends upon the issuer's circumstances and preferences.

scholarly journals International Real Estate Review

2018 ◽  
Vol 21 (3) ◽  
pp. 367-396
Author(s):  
Lucia Gibilaro ◽  
◽  
Gianluca Mattarocci ◽  
Keyword(s):  
Real Estate ◽  
Initial Public Offering ◽  
Real Estate Industry ◽  
Real Estate Investment ◽  
The Real Estate ◽  
Financial Firms ◽  
International Evidence ◽  
Public Offering ◽  
The Cost ◽  
The Empirical Analysis

Real estate investment trusts (REITs) frequently collect new financial resources by issuing new shares and bonds or requesting for new loans to finance their investment policy. Due to the low transparency of the market, the success and the cost of financing are significantly affected by the reputation and the guarantee offered by the syndicated consortium. International evidence suggests that the decision to change syndicated banks could impact the success of raising new capital for industrial and financial firms, but there is no concrete evidence which suggests that this is the case in the real estate industry. The paper considers a representative sample of US REITs to examine the frequency of switching decisions in the industry and their relationship with leverage policy. The empirical analysis demonstrates a greater likelihood of creating a new financing consortium when a REIT is poorly performing and the average interest rate is increasing. Moreover, the switching strategy is more frequently adopted when the REIT is planning to increase leverage and the current level of leverage is still far from the target value. Results obtained are robust with respect to the new consortium definition and the initial public offering (IPO) effect.

Alibaba Group Initial Public Offering: A Case Study of Financial Reporting Issues

2016 ◽  
Vol 31 (4) ◽  
pp. 449-460 ◽  
Author(s):  
Qing L. Burke ◽  
Tim V. Eaton
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Financial Accounting ◽  
Learning Needs ◽  
York Stock Exchange ◽  
Accounting Courses ◽  
Chinese Company ◽  
Public Offering

ABSTRACT In September 2014, the Chinese e-commerce giant Alibaba Group Holding Limited issued shares on the New York Stock Exchange, making it the world's largest initial public offering. This case examines different aspects of the Alibaba Group's initial public offering, including Alibaba Group's business model, financial reporting and corporate governance, as well as the macroeconomic, political, and legal environment in which the company operates. In addition, this case will familiarize students with the risks and opportunities for Chinese companies and investors when a Chinese company lists in the U.S. This case is suitable for financial accounting and international accounting courses at the intermediate and advanced levels for undergraduates as well as graduate students. The case is scalable, and instructors can choose from multiple sections of the case and different case questions to tailor the case difficulty to their students' learning needs.

The Hole in the Doughnut: Accounting for Acquired Intangibles at Krispy Kreme

2006 ◽  
Vol 21 (3) ◽  
pp. 297-312 ◽  
Author(s):  
Lori Holder-Webb ◽  
Mark Kohlbeck
Keyword(s):  
Executive Compensation ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Real World ◽  
Intangible Assets ◽  
Purchase Price ◽  
Real World Setting ◽  
Exit Costs ◽  
Accounting Courses ◽  
Public Offering

Krispy Kreme Doughnuts, Inc. used a 2000 initial public offering (IPO) to embark on an active expansion and franchise reacquisition program. This case focuses on this high-visibility franchise reacquisition program and several associated and highly controversial accounting issues, and provides an opportunity to examine numerous technical and conceptual issues in a real-world setting. In the case, you will encounter a variety of financial reporting issues—from identification and valuation of uncommon intangible assets in Part 1, to acquisition accounting, purchase-price allocations, contingent consideration, exit costs, executive compensation, and loan impairments in Part 2. The case is appropriate for use in intermediate and advanced accounting courses.

Banks’ Balance Sheets and Liquidation Values: Evidence from Real Estate Collateral

2019 ◽  
Vol 33 (2) ◽  
pp. 504-535 ◽  
Author(s):  
Rodney Ramcharan
Keyword(s):  
Real Estate ◽  
Asset Price ◽  
Balance Sheet ◽  
Asset Sales ◽  
Balance Sheets ◽  
Oxford University ◽  
Policy Interventions ◽  
Asset Purchases ◽  
Bank Equity ◽  
Published Paper

Abstract This paper finds that declining bank equity or liquidity reduces liquidation values of bank-owned real estate and accelerates the pace of asset sales. Buyers of these assets earn significant returns for providing liquidity to banks, as prices tend to rebound sharply after sales by illiquid banks. Lower liquidation values also depress the prices of nearby real estate transactions. Policy interventions, such as equity injections and central bank asset purchases, increase liquidation values by providing institutions with the balance sheet capacity to slow asset sales. This evidence suggests that balance sheet adjustments at financial institutions can explain real asset price dynamics. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Rosario Acero S.A.1

2017 ◽  
pp. 1-23
Author(s):  
Robert F. Bruner ◽  
Casey S. Opitz ◽  
Renee Weaver
Keyword(s):  
Initial Public Offering ◽  
Steel Mill ◽  
Board Chair ◽  
Private Placement ◽  
Advantages And Disadvantages ◽  
Course Of Action ◽  
Comparative Advantages ◽  
Public Offering ◽  
Small Steel

In March 1997, the board chair of this small steel mill is pondering how to finance the growth of his firm: either with an initial public offering of equity or a private placement of 8-year senior notes with warrants. The task for the student is to sort out the comparative advantages and disadvantages of each alternative—including valuing the possible securities—and recommend a course of action.

Assessing the Impact of Customer Concentration on Initial Public Offering and Balance Sheet–Based Outcomes

2017 ◽  
Vol 81 (6) ◽  
pp. 42-61 ◽  
Author(s):  
Alok R. Saboo ◽  
V. Kumar ◽  
Ankit Anand
Keyword(s):  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Balance Sheet ◽  
Performance Outcomes ◽  
Customer Relationships ◽  
Negative Effects ◽  
Public Offerings ◽  
Prior Literature ◽  
Public Offering ◽  
The Impact

Using the notion of customer concentration, the authors argue that firms should evenly spread their revenues across their customers, rather than focusing on a few major customer relationships. Prior literature suggests that major customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm's bargaining power relative to its customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in customer concentration reduces profitability by 3.35% (or about $7 million) in the subsequent year, or 9.4% cumulatively over the next four years (or about $20.32 million). Further, the authors find that the negative effects of customer concentration decrease with increase in organizational (marketing, technological, and operational) capabilities and increase with low customer credit quality.

Horse Vet, LLC: Transaction Analysis and Statement of Cash Flows Preparation (Option 1)

2017 ◽  
pp. 1-12
Author(s):  
Mark E. Haskins
Keyword(s):  
Financial Reporting ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Financial Statement ◽  
Balance Sheets ◽  
Income Statement ◽  
Transaction Analysis ◽  
Business Events ◽  
Statement Of Cash Flows

This case pertains to the foundational underpinnings of the accounting process and the statement of cash flows. In Part I, students are presented with 23 business events that they must evaluate for recording in the financial records. Part II requires students to prepare a 2012 statement of cash flows using the information presented in the company's 2011 and 2012 year-end balance sheets along with its 2012 income statement. In Part III, students must rely on a 2011 balance sheet and a 2011 statement of cash flows to work backward to derive the 2010 year-end balance sheet. There are two versions of this case: Option 1 and Option 2. The Option 2 case is a bit more challenging than the Option 1 case. Instructors should use Option 2 if they feel students are well grounded in their understanding of financial statement relationships and the customary financial reporting of a typical set of business events. Both cases reinforce students' learning related to the accounting process and the connectivity between the financial statements. Please note that only one version of the case should be used due to the existence of some overlap between the two.

Does the JOBS Act Reduce Compliance Costs of Emerging Growth Companies? Theory and Evidence

2019 ◽  
Vol 38 (4) ◽  
pp. 151-175
Author(s):  
Inder K. Khurana ◽  
Lei Zhao
Keyword(s):  
Initial Public Offering ◽  
Financial Reporting ◽  
Internal Control ◽  
Small Firms ◽  
Audit Fees ◽  
Significant Cost ◽  
Compliance Costs ◽  
Disclosure Requirements ◽  
Public Offering ◽  
Jobs Act

SUMMARY In April 2012, the Jumpstart Our Business Startups (JOBS) Act was enacted to revitalize the initial public offering market by reducing regulatory burdens for small firms. We focus on audit fees, one directly observable and significant cost of complying with the JOBS Act. Specifically, we examine whether the exemption of emerging growth companies (EGCs) from SOX 404(b) auditor attestations of internal control over financial reporting and other disclosure requirements affected audit fees paid by EGCs. We find that EGCs paid higher audit fees than non-EGCs after IPOs. Moreover, we find that the positive relation between EGCs and audit fees is more pronounced for firms with high financial reporting risk. Collectively, our results reveal an unintended consequence of the JOBS Act: it failed to reduce audit fees, a major component of the compliance costs of EGCs.

scholarly journals IPO as a VC-Funds Type of Exit

2019 ◽  
pp. 99-129
Author(s):  
Dorota Podedworna-Tarnowska
Keyword(s):  
Initial Public Offering ◽  
Private Equity ◽  
Third Party ◽  
Going Public ◽  
Public Offerings ◽  
Advantages And Disadvantages ◽  
The Us ◽  
Portfolio Company ◽  
Venture Capital Firms ◽  
Public Offering

The key characteristic of private equity finance is that investors hold their investments only for a limited period of time. The key goal of VC funds is to grow the company to a point where it can be sold at a price that far exceeds the amount of capital invested. This process is called an exit or divestment. There are three basic types of exits: going public, being acquired by a larger corporation, a sale to a third-party investor.It is a widely believed and accepted proposition in private equity literature that the initial public offering of a private equity portfolio company is the most successful and profitable exit opportunity. However, according to the few sources of literature, public offerings are not the preferred divestment type for venture capital firms. Going public is one of the most critical decisions in the lifecycle of a firm. This is not easy, as the process is very comprehensive and complex. Hence, a lot of considerations should be taken into account. Because every investee firm is different, a development plan to achieve a successful exit takes into consideration a number of macroeconomic and microeconomic factors. Moreover, several advantages and disadvantages of exit through an IPO could be indicated. The objective of this paper is to show the success and profitability of going public by VC funds. The VC’s exit type as a way of cashing out on its investment in a portfolio company is a consequence of the exit strategy, which means the plan for generating profits for owners and investors of a company. While an IPO is the most spectacular and visible form of exit, it is not the most common one, as historically in the US it was, but still in Europe it has not been yet. There will be both literature and statistical data coming from different studies and reports used in this research.

scholarly journals The need for transparency, responsibility and accountability: the case of facebook IPO

2013 ◽  
Vol 11 (1) ◽  
pp. 316-325 ◽  
Author(s):  
Enrico Maria Cervellati ◽  
Adriano Di Sandro ◽  
Luca Piras
Keyword(s):  
Initial Public Offering ◽  
Financial Reporting ◽  
Corporate Culture ◽  
Conflicts Of Interest ◽  
Financial Statements ◽  
Monitoring Systems ◽  
Marketing Activity ◽  
The Road ◽  
Price Range ◽  
Public Offering

This paper aims to describe and critically analyse the Facebook Initial Public Offering (IPO), initially focusing on the pre-IPO assessments made by underwriters, and then comparing them with the market evidence. The initial weak performance disappointed all those investors believing in a fast stock increase, causing in turn the rise of bad expectations about the company’s projects. As a matter of fact, the stock trend did not reflect the enthusiasm that the financial community showed during the IPO’s marketing activity or during the road show. The stock demand was far superior than the supply during all the pre-IPO activities, and even after the upward revisions of the price range. Thus, the assessment of the valuation methods used to set the offer price plays a key role to explain the reasons of the stock performance. We analyse analysts’ reports to investigate the reasons of their distorted valuations. The case of the Facebook IPO stresses the importance of supervision to ensure transparent financial statements and protect investors. Lack of transparency, wrong corporate culture and conflicts of interest may provoke stock crashes and damage investors and the financial system overall. Ensuring integrity of financial reporting and monitoring systems is thus essential to ensure responsibility, as well as accountability.

Sign in / Sign up

Export Citation Format

Share Document