Topic
Embedded value
About: Embedded value is a research topic. Over the lifetime, 343 publications have been published within this topic receiving 8853 citations.
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TL;DR: In this article, the authors analyze embedded value reporting by firms with life insurance operations to assess the impact of unregulated financial reporting on transparency and to examine the institutional characteristics that promote unregulated reporting.
Abstract: I analyze Embedded Value (EV) reporting by firms with life insurance operations to assess the impact of unregulated financial reporting on transparency and to examine the institutional characteristics that promote unregulated reporting. Under EV accounting the present value of future cash flows from in-force contracts is included in shareholders’ equity, and profit is calculated as the change in equity between two periods. In contrast to Generally Accepted Accounting Principles (GAAP), this approach produces higher shareholder’s equity and recognizes income at contract inception. I find firms that adopt EV reporting exhibit a decline in information asymmetry, with the decline increasing as EV reporting evolves to address methodological deficiencies and to permit more comparability across firms. The decrease in information asymmetry is contingent on providing an audit certification, and larger for firms that commit to providing EV reports. Moreover, I document that EV reporting is more widespread in countries with more hostile takeovers, managers that do not avoid volatile income measures, regulators that are less likely to intervene in the product market and analysts that believe EV disclosure to increase the value of their information intermediation function.
TL;DR: In this article, the authors test empirically the value relevance of the alternative "realistic reporting regime" of voluntary embedded value (EV) disclosures that has been generally adopted by leading UK and Continental European insurers.
Abstract: Even under the International Financial Reporting Standard 4 (IFRS 4), the current accounting regime for UK life insurance companies is oriented towards delaying the recognition and distribution of profit, and still remains largely rooted in traditional requirements for statutory solvency reporting. This paper tests empirically the value relevance of the alternative ‘realistic reporting regime’ of voluntary embedded value (EV) disclosures that has been generally adopted by leading UK and Continental European insurers. In recent years, EVs have also been used internally (but not disclosed) by many US life insurers. The results found here are consistent with value relevance and some implications for standard-setters are explored.
TL;DR: In this article, the authors examined the value relevance of financial statements for life insurance firms, with particular interests to the embedded value (EV) disclosure, and found that the EV of equity has an incremental information role for book value of equity, which indicates that the accounting mismatching problem in the insurance industry creates a demand for fair value accounting.
Abstract: In light of the recent exodus of foreign insurers from Taiwan and the local insurers’ outcries against the International Financial Reporting Standard (IFRS) 4 Insurance Contracts, we examine the value relevance of financial statements for life insurance firms, with particular interests to the embedded value (EV) disclosure. We find that the EV of equity has an incremental information role for book value of equity, which indicates that the accounting mismatching problem in the insurance industry creates a demand for fair value accounting. The fair value of liabilities under IFRS 4 Phase 2 has been disputed globally by accountants, actuaries, academia and regulators. The EV model is a concept approaching the fair value model. The research findings provide important empirical evidences supporting the fair value concept of IFRS 4.
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1 Jan 1998
TL;DR: The authors showed that a commodity value can also be determined by the amount of any certain kind of input material (like a peanut or steel theory of value) and to that extent any material power (peanut power or steel power) is no less exploitable than labour power.
Abstract: It was once widely acknowledged in the Marxian literature that Marx’s value theory was not a theory of commodity price but a qualitative (not a quantitative) account of exploitative class relations. This acknowledgement has been stressed by the theoretical failure of Marxian economists in defending Marx’s transformation from value into price. Once its role as a theory of price was reluctantly given up, however, its other role as a theory of exploitation was also bound to collapse. Among others, Roemer (1982), Bowles and Gintis (1981) and Samuelson (1982) have shown that a commodity value can also be determined by the amount of any certain kind of input material (like a peanut or steel theory of value) and to that extent any material power (peanut power or steel power) is no less exploitable than labour power. Roemer (1986) has gone a step further to show that exploitation can be analyzed even with no such (peanut or steel-like) value category, in which Marx’s original notion of exploitation has been debased into a thing not founded on equivalent exchanges but on property relations. In the end Marx’s value theory has been proved redundant in connection with both exploitation and price. But redundancy is recently attributed to the conventionally mistaken homogeneous labour theory of value.2
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Performance Metrics
| Year | Papers |
|---|---|
| 2021 | 3 |
| 2020 | 2 |
| 2019 | 2 |
| 2018 | 3 |
| 2017 | 14 |
| 2016 | 20 |