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%&#' in (ew )ealand* effects on xnancial statements and ratios

+arwic, 'tent$ -ichael .radbur/ and 0ill 1oo,s
'chool of "ccountanc/$ -asse/ 2niversit/$ "uc,land$ (ew )ealand
"bstract
!ur3ose 4 The 3ur3ose of this 3a3er is to examine the xnancial statement im3acts of ado3ting () %&#' during 005 through 008. 5esign/methodolog//a33roach 4 The effects of () %&#' on the xnancial statements and ratios of xrst-time ado3ters of () %&#' for a stratixed random sam3le of 56 listed com3anies is anal/sed. %n total$ 16 of these were earl/ ado3ters and 40 of which waited until ado3tion of () %&#' became mandator/. The anal/sis of the xnancial statement im3act of () %&#' is conducted in the context of the accounting choice literature. &indings 4 The results show that 87 3er cent of xrms are affected b/ () %&#'. The median and inter-8uartile ranges indicate that for most xrms the im3act of () %&#' is small. 1owever$ the maximum and minimum values indicate the im3act can be large for some entities. The im3act has considerable effects on common xnancial ratios. #esearch limitations/im3lications 4 The usual limitations a33licable to small sam3les a33l/. !ractical im3lications 4 The xndings ma/ be useful to regulators and 3olic/ ma,ers reviewing xnancial re3orting re8uirements. 9riginalit//value 4 This stud/ is the xrst to offer a com3rehensive em3irical anal/sis of the effect of ado3ting %&#' on xnancial statements in (ew )ealand$ as well as on selected ,e/ ratios of interest to xnancial anal/sts. The data used are more recent than most %"' or %&#' studies around the world and are stratixed to allow for com3arison between voluntar//earl/ ado3ters and mandator//late ado3ters.

:e/words &inancial re3orting$ %nternational standards$ -anagement ratios$ (ew )ealand !a3er t/3e #esearch 3a3er

1. %ntroduction This 3a3er examines the im3act of international xnancial re3orting standards <%&#'= on the xnancial statements of (ew )ealand listed com3anies. '3ecixcall/$ we document the im3act of () %&#' on the following xnancial statement elements* assets$ liabilities$ e8uit/$ revenues and ex3enses. +e then examine the xnancial statement im3act of () %&#' anal/sed b/ accounting standard <e.g. xnancial instruments$ income taxes=. &inall/$ we examine the im3act of () %&#' on some common xnancial ratios. 5as,e et al. < 008= note that the ado3tion of %&#' b/ over 100 countries is one of the most signixcant changes in world accounting histor/>1?. The/ also note that em3irical evidence on the conse8uences of mandator/ %&#' is in its infanc/ and em3hasise the need for further evidence.

!acixc "ccounting #eview @ol. (o. $ 010 33. ; -107 8 Amerald Brou3 !ublishing Cimited 0114-058 59% 10.1108/011405810110744;4

The authors would li,e to extend their than,s to 3artici3ants at a -asse/ 2niversit/ research wor,sho3$ es3eciall/ "she8 #ahman$ for hel3ful suggestions. +arwic, 'tent gratefull/ ac,nowledges xnancial su33ort from the (ew )ealand %nstitute of Dhartered "ccountants and the "ccounting and &inance "ssociation of "ustralia and (ew )ealand.

This 3a3er ma,es several contributions to the literature. %t is the xrst to offer a com3rehensive anal/sis of the xnancial statement effects of ado3ting %&#' in (ew )ealand. 'imilar to 1ung and 'ubraman/am < 007=$ we re3ort detailed xnancial statement effects of ado3ting %&#'. This contribution ma/ be useful to regulators and 3olic/ ma,ers that are currentl/ reviewing the a33lication of %&#' for smaller entities in (ew )ealand. 'econd$ studies examining the value relevance of %&#' <e.g. 5as,e et al.$ 008E 1ung and 'ubraman/am$ 007E .arth et al.$ 008= have found mixed results. " 3re-re8uisite for %&#' to have value relevance is that %&#' must im3act xnancial ratios. 1ence$ a focus of this stud/ is the im3act of %&#' on common xnancial ratios. &urthermore$ the 3otential im3act of %&#' on ratios$ will not onl/ im3act the assessment of value relevance but also anal/stsF credit decisions <e.g. credit scoring models such as "ltman$ 1;68= and contracting decisions b/ xrms that em3lo/ xnancial ratios <e.g. debt covenants$ com3ensation contracts=. Third$ this stud/ is 3artitioned to allow for com3arison$ between voluntar/ earl/ ado3ters and mandator/ late ado3ters$ of the xnancial statement effects of () %&#'. 2nderstanding the im3act of () %&#' is an im3ortant xrst ste3 in see,ing a dee3er understanding of the motivations of earl/ ado3ters of %&#' in (ew )ealand. &ourth$ the investigation 3eriod covers xscal /ears commencing on$ or after$ 1 0anuar/ 005 through to G0 'e3tember 008. This 3rovides more recent information on the im3act of %&#' than is included in most recent studies. This is an im3ortant consideration in view of the signixcant$ fre8uent and continuing amendments to %&#' since the 005 Hstable 3latformI was achieved. &ifth$ most studies examine the switch to %&#' where 3revious B""! was ,nown to differ signixcantl/ from the international standards$ whereas old () B""! is 3erceived to be relativel/ similar. Dontrar/ to ex3ectations$ the anal/sis of effects in such a setting indicates that %&#' information still conve/s new information <Dhristensen et al.$ 007=. %n summar/$ this 3a3er ma,es a number of contributions with regard to the im3act of %&#' ado3tion. The 3a3er 3roceeds as follows. 'ection 3rovides bac,ground information on the (ew )ealand ado3tion of %&#'. 'ection G briex/ reviews the theor/ and recent literature relevant to the im3act of %&#' on xnancial statements. 'ection 4 contains a descri3tion of the sam3le selection and data. 'ection 5 describes and discusses the results and 'ection 6 3rovides a summar/ and conclusion.

%&#' in (ew )ealand

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. .ac,ground on the ado3tion of () %&#' %n 1;74$ the xrst of a new series of accounting standards issued b/ the (ew )ealand 'ociet/ of "ccountants <i.e. ''"! 1 5isclosure of "ccounting of !olicies= carried the %nternational "ccounting 'tandards Dommittee crest <.radbur/$ 1;;8=. 1owever$ even that standard contained modixcations. &urthermore$ in the following /ears$ (ew )ealand develo3ed its own standard setting agenda with regard to accounting issues. " decision was ta,en b/ the &inancial #e3orting 'tandards .oard <&#'.=> ? in 1;;7 to base new accounting standards on %nternational or "ustralian accounting standards. These were modixed to ensure sector neutralit/ and consistenc/ with other (ew )ealand 3ronouncements <.radbur/ and van )ijl$ 006=. 9n 1 9ctober 00 $ the "ccounting 'tandards #eview .oard <"'#.= 3ro3osed that listed issuers in (ew )ealand should ado3t %&#' and on 1; 5ecember 00 the/ announced that ado3tion of %&#' was to be mandator/ for re3orting entities in (ew )ealand for 3eriods beginning on or after 1 0anuar/ 007. 2nli,e the Auro3ean 2nion$ "ustralia and man/ other countries which

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o3ted for mandator/ ado3tion in 005$ the "'#. allowed earl/ ado3tion for 3eriods beginning on or after 1 0anuar/ 005 <.radbur/ and van )ijl$ 006=. 9n 1 'e3tember 007 the "'#. announced it had decided to dela/ mandator/ ado3tion of () %&#' for small com3anies that met s3ecixed criteria$ 3ending a government review of xnancial re3orting re8uirements for small- and medium-siJed com3anies$ which was to be commenced during mid- 008. " 3ossible outcome of this review is that man/ entities ma/ no longer be re8uired b/ law to 3re3are B""!-com3liant xnancial statements <'eal/-&isher$ 007=. This review therefore has major im3lications for a large number of (ew )ealand businesses. The xndings of this 3a3er ma/ be informative to 3olic/ ma,ers conducting this review. 'ince the "'#.Fs announcement in 00 $ there has been much in the wa/ of comment b/ various authors$ 3rofessional bodies$ accounting xrms and commercial entities$ about the im3act of ado3ting %&#' <e.g. 5unstan$ 00 E Arnst K Loung$ 004=. %t is widel/ acce3ted that ado3ting %&#' ma/ have signixcant im3lications.

G. Theor/ and literature &ields et al. < 001= 3rovide a review of the accounting choice literature u3 until the 1;;0s. +e therefore begin with a summar/ of their review$ followed b/ a review of more recent studies related to the im3act of %&#'. G.1 'ummar/ of a review of accounting choice literature u3 until the 1;;0s &ields et al. < 001= refer to three main categories of motivations for accounting choice* contracting$ asset 3ricing and inxuencing external 3arties. The/ note that in general$ researchers xnd that efxcient contracting incentives are effective in contractual arrangements$ namel/ that managers select accounting methods to increase com3ensation <the Hbonus h/3othesisI= and to avoid breaching debt covenants <the Hdebt h/3othesisI=. %n their o3inion the literature leaves some uncertaint/ as to whether these choices are made o33ortunisticall/ or for value-maximising 3ur3oses. H"sset 3ricingI$ concerns the economic conse8uences of accounting information on share 3rices <mar,et value of e8uit/= and cost of ca3ital. &ields et al. < 001= state that xndings related to accounting choices being made for their effect on share 3rices are generall/ unconvincing$ mainl/ because of com3eting h/3otheses$ such as mar,et efxcienc/ and contracting. The/ note that results are mixed as to whether increased levels of disclosure results in decreased cost of ca3ital. The 3olitical cost h/3othesis suggests that accounting choices are made to avoid transfers of wealth to external 3arties. Avidence from this research indicates that accounting choices are made to reduce or defer taxes. 1owever$ the stoc, mar,et effects of these actions is mixed.

G. #ecent studies relating to im3act of %&#' This section briex/ reviews more recent em3irical studies examining the xnancial statement effects of ado3ting %&#' <e.g. 5as,e et al.$ 008E Cee et al.$ 008E .arth et al.$ 008E and 1ung and 'ubraman/am$ 007=. 5as,e et al. < 008= examine the economic conse8uences of mandator/ %&#' ado3tion for a large sam3le of xrms across 6 countries covering xscal /ears ending on$ or after$ 1 0anuar/ 001 through to G1 5ecember 005. Their xndings indicate that %&#' ado3tion a33ears to be associated with 3ositive economic conse8uences for mar,et li8uidit/$ cost of ca3ital$ and xrm value. These ca3ital mar,et effects are most

3ronounced for voluntar/ ado3ters$ both in the /ear when the/ switch and again later$ when %&#' becomes mandator/. The/ caution that the initial im3act is li,el/ to be due to self-selection and that the mandator/ im3act will be affected b/ omitted variables such as concurrent im3rovements to securities laws$ regulator/ enforcement$ xrm governance$ and re3orting incentives. 'u33ort for the view that factors other than %&#' contribute signixcantl/ to ca3ital mar,et effects is evident in other studies <e.g. Cee et al.$ 008E .arth et al.$ 008=. Cee et al. < 008= xnd$ across a sam3le of 17 Auro3ean countries$ that the cost of ca3ital onl/ reduced in countries with high re3orting incentives and enforcement. .arth et al. < 008= xnd that ado3tion of %&#' is associated with higher accounting 8ualit/. The/ stud/ xrms from 1 countries a33l/ing %"' between 1;;4 and 00G and xnd that there is less evidence of earnings management$ more timel/ loss recognition and more value relevance of accounting information for their sam3le xrms than for a matched sam3le of xrms a33l/ing non-2' domestic B""!. 1ung and 'ubraman/am < 007= examine the xnancial statement effects of ado3ting %"' during 1;;8 4 00 . The/ measure xnancial statement effects b/ direct com3arison of xnancial statements 3re3ared under both %"' and Berman B""! <referred to as 1andelsgesetJbuch or H1B.I=. The/ also contend that studies of the effects of %"' based on 3re-1;;8 xnancial statements are unli,el/ to be re3resentative. The core %"' standards were com3leted in 1;;8 and removed the choice of 3artial ado3tion <i.e. Hcherr/ 3ic,ingI= of %"' b/ re8uiring full im3lementation of %&#'. 1ung and 'ubraman/am < 007= 3resent two sets of anal/ses. &irst$ the major accounting differences between 1B. and %"' are anal/sed. The/ xnd that the ado3tion of %"' resulted in H. . . wides3read and signixcant changes to deferred taxes$ 3ensions$ 3ro3ert/$ 3lant and e8ui3ment$ and loss 3rovisionsI <1ung and 'ubraman/am$ 007$ 3. 6 5=. 9verall$ total assets and boo, value of e8uit/ were found to be signixcantl/ larger under %"' than under 1B.$ while variations in boo, value and net income were found to be signixcantl/ higher. 'econd$ the/ examine the value relevance of boo, values and net income$ as well as the timeliness of income information. There is no evidence that %"' im3roves value relevance of boo, value or net income. There is wea, evidence suggesting that %"' income has increased as/mmetric timeliness <i.e. %"' incor3orates bad news into income in a more timel/ manner than 1B.=. These recent studies xnd mixed results for value relevance of %&#'. .arth et al. < 008=$ xnd more value relevance and 1ung and 'ubraman/am < 007= xnd no evidence that %&#' im3roves value relevance. 5as,e et al. < 008= note an increase in e8uit/ valuations but onl/ if the/ account for the 3ossibilit/ that the effects occur 3rior to the ofxcial ado3tion date. This echoes comments b/ &ields et al. < 001= that xndings related to the share 3rice effect of accounting choices are generall/ unconvincing. %n assessing the value relevance of %&#'$ a 3re-re8uisite is that the ado3tion of %&#' should have a signixcant im3act on xnancial statements and common xnancial statement ratios. 1ence$ the objective of this stud/ is to 3rovide descri3tive evidence of the im3act of %&#'. The stud/ that is most relevant to ours is 1ung and 'ubraman/am < 007=. The/ ma,e a case for a countr/-s3ecixc a33roach$ which considers the direct effects of ado3ting %"' for the same set of xrm /ears. 'uch an a33roach would hel3 to overcome 3roblems associated with com3aring across countries with different institutional arrangements$ as well as controlling for time-series differences. +e im3rove on their

%&#' in (ew )ealand

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anal/sis as we use the mandator/ %&#'/local B""! reconciliations <now an %&#' 1 re8uirement=$ while their stud/ relies on voluntar/ %"'/local B""! reconciliation disclosures. 1ence$ their stud/ is li,el/ to have a self-selection bias. 1ung and 'ubraman/am < 007= are onl/ able to observe Hboo, valueI reconciliation information <i.e. e8uit/ adjustments= for 57 xrmsE and Hnet incomeI reconciliation <i.e. 3roxt at end of 3rior 3eriod adjustments= for G1 xrms in their sam3le of 80 xrms. "lso$ the investigation 3eriod for this 3a3er is more current than 1ung and 'ubraman/am < 007=. "s noted earlier$ this is im3ortant in view of the signixcant$ and on-going amendments to %&#' since the Hstable 3latformI was achieved in 005. 1ung and 'ubraman/am < 007= consider the ado3tion of %&#' where Berman B""! was ,nown to differ signixcantl/ from %"'$ whereas old (ew )ealand B""! is 3erceived to be relativel/ similar. Dhristensen et al. < 007= xnd that in s3ite of %&#' being relativel/ similar to 2:-B""!$ the %&#' reconciliations contained information that anal/sts considered relevant for xrm valuation and that xrms o33ortunisticall/ tended to dela/ unfavourable reconciliations.

4. 'am3le selection and data &igure 1 re3orts the outcome of our sam3le selection 3rocedures. +e begin with all 161 com3anies listed on the (ew )ealand 'toc, Axchange <()M= on 1 -arch 007. +e then stratif/ these into earl/ and late ado3ters of () %&#'. Aarl/ ado3ters <A"= are the re3orting entities that chose to ado3t () %&#' for 3eriods beginning on or after 1 0anuar/ 005$ but before it became mandator/ <3eriods beginning on or after 1 0anuar/ 007=. 'election as an A" is onl/ made once the H. . . ex3licit and unreserved statement of com3liance . . . I with () %&#' has been sighted in a xrst full-/ear set of xnancial statements>G?. 9ur 3rocedures identif/ an initial set of 48 A". The remaining total of 11G Hnon-A"I forms our initial 3o3ulation of Cate "do3ters <C"=. These are re3orting entities listed on the ()M$ which chose to wait until 3eriods beginning on or after 1 0anuar/ 007$ when it became mandator/ to ado3t () %&#'. +e lose 1

&igure 1. Affect of sam3le selection criteria

observations where com3anies delisted from the ()M after 1 -arch 007$ resulting in a reduced 3o3ulation of 101 C". +e conxrm that the/ are C" b/ ensuring that the H. . . ex3licit and unreserved statement of com3liance . . . I with () %&#' a33ears for the xrst time in a xrst full-/ear set of xnancial statements beginning on or after 1 0anuar/ 007. &or the 48 A" <!anel .=$ observations are discarded because the entit/ uses B""! other than () %&#' <four observations=E uses a functional currenc/ other than () dollars < =E has no 3rior /ear xnancial statements available as the xrst /ear of listing on the ()M is also xrst /ear of a33lication of () %&#' <1=E or has no reconciliation because () %&#' was ado3ted from its xrst /ear of o3eration <1=. "s the data are hand collected from xnancial statements and footnotes$ we ma,e a random selection$ of a33roximatel/ 40 3er cent$ from each of the A" and C" 3o3ulations. This results in a sam3le of 56 observations$ com3rising 16 A" and 40 C". 9ur sam3le siJe is a trade off between the cost of collecting information and the benexts of a larger sam3le. +e gather two sets of xnancial statements for all observations* the xrst full-/ear () %&#' xnancial statements and the /ear 3rior to ado3tion of () %&#'. %nformation on the adjustments made to the H3re-() %&#'I /ear xgures are extracted from the () %&#'/old () B""! reconciliations. () %&#' 1 re8uires com3aratives to be restated and reconciled in the xrst /ear of ado3ting () %&#'. The reconciliations varied considerabl/ in format and level of detail su33lied and it was im3ortant to determine and se3arate out which xnancial statement elements were im3acted b/ () %&#'$ the amounts involved and the accounting standards to which these im3acts should be attributed. Table % re3orts descri3tive statistics of the sam3le xrms. %n this table we re3ort old () B""! xgures <i.e. H9C5 B""!I= as this is the base from which we measure the differences due to the ado3tion of () %&#'. The mean total assets xgure is N77 .1 million$ mean total e8uit/ is N477.6 million and mean net 3roxt is a loss of N14;. million. The sam3le data are not normall/ distributed and for the most 3art are le3to,urtic and 3ositivel/ s,ewed. This results in the median being a better indicator of central tendenc/ than the mean. +e therefore rel/ on non-3arametric tests to anal/se statistical differences in our sam3le data.

%&#' in (ew )ealand

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5. #esults 5.1 5escri3tive statistics* im3act of () %&#' 5escri3tive statistics of the im3act of () %&#' for the xnancial statement elements <as 3er the () &ramewor,= are 3resented in Table %%.

Total assets -ean 'tandard deviation -inimum 5 3ercentile -edian 75 3ercentile -aximum (ote* n O 56 77 $084 1$70 $ G0 164 0$ 54 ; $0;; 4G8$;48 8$;;1$4 5

Total liabilities ;4$8 7 7G0$1;G 1 4$616 5$41; 180$ 40 G$8 5$81;

Total e8uit/ 477$6 7 1$ 8;$G;8 ;5 17$;78 48$7;4 77$410 8$7G8$48;

Total revenue G0G$610 671$058 6 ;$871 5 $ G4 G 0$;01 4$ ;7$000

(et 3roxt 14;$1;1 1$ 7;$ GG ;$54 $816 76 G$140 G5$7 14$000

Table %. 5escri3tive statistics <N000= of sam3le under 9C5 B""!

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!anel "* magnitude of change a -ean 'tandard deviation -inimum 5 3ercentile -edian 75 3ercentile -aximum !anel .* sign of changes <P= (egative !ositive (o change !anel D* statistical tests b ) statistic 3-value <two-tailed=

Total assets

Total liabilities

Total e8uit/

Total revenue

(et 3roxt

;8

0.0G1 0. 06 0.640 0.000 0.00 0.0 0 1. G0

0. 16 0.714 0.000 0.000 0.0 7 0.151 5.1G0

0.070 0.58 G.440 0.046 0.005 0.01 .1G0

0.1G4 0.71G 0.;;0 0.01 0.000 0.010 G.;50

0.1 7 0.468 1.000 0.008 0.0 4 0.14; 1.;G0

5 55 0 .;40 0.00G

4 75 1 5.71G 0.000

57 G0 1G .17G 0.0G0

41 G6 G 0.1;; 0.84

G 55 1G .5 0.01

Table %%. %m3act of () %&#' on xnancial statement elements

(otes* n O 56E aThe change is estimated as <() %&#'/9C5 B""!= 4 1E bThe re3orted test statistic is a +ilcoxon test for e8ualit/ of matched 3airs

!anel " of Table %% re3orts the magnitude of change in a 3articular xnancial statement element due to the ado3tion of () %&#'. %t is measured as* () %&#'/9C5 B""! - 1. &or exam3le$ the mean <median= change in total assets due to the ado3tion of () %&#' is G.1 3er cent <0. 3er cent=. !anel . re3orts the number of increases$ decreases and no changes. The ado3tion of () %&#' results in an increase in assets for 55 3er cent <G1/56= of the observations$ a decrease for 5 3er cent of observations and 0 3er cent remain unchanged. !anel D re3orts +ilcoxon tests for difference in the distribution of a variable for matched 3airs. That is$ each xrm is com3ared with itself for differences between 9C5 B""! and () %&#'. The general increase in total assets due to the ado3tion of () %&#' is statisticall/ signixcant at the 0.01 level. Table %% reveals that the largest im3act of () %&#' is for liabilities$ where 75 3er cent of observations <4 /56= re3ort an increase in liabilities and onl/ 4 3er cent re3ort a decrease. The im3act of () %&#' is wides3read as 87 3er cent of xrms are affected. That is$ onl/ 1G 3er cent of xrms have no changes to e8uit/ or net 3roxt. 9verall$ the im3act of () %&#' signixcantl/ increases assets$ liabilities and net 3roxt$ but decreases e8uit/. The im3act on revenue is not signixcant at conventional levels. The inter-8uartile range for most elements is small indicating that for most xrms$ the im3act of () %&#' is small. 1owever$ the maximum and minimum values indicate that the effect of () %&#' can be 8uite substantial for some xrms. &or exam3le$ the inter-8uartile range for net 3roxt is 0.157 <0.14; 4 < 0.008== and the range is .;G0 <1.;G0 4 < 1.000==.

5. 5escri3tive statistics* im3act of () %&#' anal/sed b/ earl/ <late= ado3ters and b/ small <large= entities Table %%% re3orts the im3act of () %&#' on xnancial statement elements anal/sed b/ earl/ and late ado3ters. This Table is similar in 3resentation to Table %%.

(et 3roxt

0.16; 0.51G 0.;G0 0.00;0.00 0.18 1.;G0

.01G 0.0G5 GG5G15 (otes* aThe change is 0. 86 0.775 estimated as <() %&#'/9C5 B""!= 4 1E bThe re3orted test statistic is 1.51G 0.1G0 a +ilcoxon test for e8ualit/ of matched 3airs 4.76 0.000

%&#' in (ew )ealand

Cate ado3ters <n 0.16; O 40= 0.8G7 0.;;0 0.0 50.0000.016 404G18 Total G.;50 Total Total liabilities e8uit/ revenue 0. G8 0.8100.0000.0000.0G50.1805. 1G0 G7G 5 0.040 0.66 G.440 0.044 0.0040.00 58 815 0 .1G0

;;

Totalassets 0.057

.6 6 0.00; 0. 18 0.0600.0000.00 0.0 G1 55G G . G0 1.1G6 0. 56 0.G 1.000 0.00G0.07 0.140 G16G6 0.540 G.570 0.7 1

(et 3roxt

0.0 1

Aarl/ ado3ters 0.048 0.16; 0.0;0 <n O 16= 0.00G0.0000.0000.600 441;G8 Total Total Total liabilities e8uit/ revenue 0.161 0.4010.0000.0000.01 0.1 51. 5;0 6811G 0.144 0.G07 1.000 0.14G 0.0 60.0140.040

.101 0.0G6 56G86

G.170 0.00

of change a 0.0G5 0.16 0.640 !anel D* statistical tests Totalassets 0.0110.0070.0150.040 b) statistic !anel .* sign of 0.847 changes(egative 3-value <two-tailed= !anel "* 5 0.G;7 magnitude-ean'tandarddeviation-ini !ositive mum 5 3ercentile-edian75 6G 3ercentile-aximum (o change 1G

Table %%%. %m3act of () %&#' on xnancial statement elements

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100

The im3act of () %&#' on A"s is signixcant for total liabilities <at the 0.01 level= and e8uit/ <at the 0.05 level=. Total assets$ revenue and net 3roxt are not statisticall/ different under () %&#' com3ared to 9C5 B""!. 9n the other hand$ total assets and total liabilities of C"s are signixcantl/ higher <at the 0.01 level=$ as is net 3roxt <at the 0.05 level=. Total e8uit/ and total revenue are not statisticall/ different under () %&#'. The minimums are generall/ much lower and maximums much higher for the C"s as com3ared to the A"s. These results are consistent with earl/ ado3ting xrms being those xrms on which () %&#' have a lower im3act. +e 3erformed a similar anal/sis <untabulated= b/ small and large xrm$ using the median xgure for total assets under 9C5 B""! as our cut-off 3oint <i.e. HsmallI $ N; $0;;$000 $ HlargeI=. +e xnd that the im3act of () %&#' on the small xrms is not signixcant$ at conventional levels$ for an/ xnancial statement elements exce3t total liabilities <at the 0.01 level=. This contrasts strongl/ with the xndings for the large xrms$ where the im3act of () %&#' is found to be signixcant for all xnancial statement elements exce3t total revenue. Total assets and total liabilities are signixcant at the 0.01 level$ and total e8uit/ and net 3roxt at the 0.05 level for the large xrms. -inimum and median xgures$ as well as the 3ro3ortion of 3ositive sign changes are generall/ much higher for the large xrms than for the small xrms. Thus$ small listed xrms are less affected b/ () %&#' than large listed xrms.

5.G 5escri3tive statistics* im3act of () %&#' b/ accounting standards Table %@ re3orts the im3act of the ado3tion of () %&#' anal/sed b/ the accounting standard that caused the accounting change and is similar to Tables %% and %%%$ exce3t that it is 3resented in landsca3e to 3rovide sufxcient detail. %n Table %@ we re3ort the balance sheet im3act as well as the income statement im3act$ se3aratel/ showing increases and decreases in revenues and ex3enses. The data for this anal/sis are extracted from the () %&#'/9C5 B""! reconciliations re8uired b/ () %&#' 1. The most informative reconciliations 3rovide full balance sheets <at date of transition and at end of 3rior 3eriod= and an income statement <at end of 3rior 3eriod=$ each of which disclose 9C5 B""!$ () %&#' and reconciliation adjustments for ever/ line item in these xnancial statements$ together with detailed notes ex3laining the adjustments$ with s3ecixc reference to the relevant () %&#' standards. Cess informative reconciliations sim3l/ reconcile A8uit/ <at date of transition and at end of 3rior 3eriod= and !roxt <at end of 3rior 3eriod= under 9C5 B""! to () %&#'$ showing material adjustments with relativel/ little in the wa/ of detailed ex3lanation and more general references to H() %&#'I rather than s3ecixc standards. "s () %&#' com3rises in excess of 40 standards$ we restrict the tables 3resented in this 3a3er to se3arate consideration of onl/ those standards that have non-Jero effects on 10 3er cent or more of our total sam3le. The most stri,ing feature of Table %@ is that$ with the exce3tion of the income tax im3act on e8uit/$ the median observation is Jero across all xnancial statements elements and accounting standards. "ll but three of the 5th 3ercentiles are also Jero. The last column in Table %@ re3orts the 3ercentages of no change. The range of Hno im3actI is from 57 3er cent to 100 3er cent. This indicates that for most xrms a s3ecixc standard of () %&#' has no im3act. 1owever$ the minimums and maximums indicate that a s3ecixc () %&#' can be ver/ material for a small number of xrms.

P no change

57;884778177;;74647784618;;;;81001008G858170;0

%&#' in (ew )ealand

P negative 71G75 0 1

1G 8G0100861G15

101
-aximum P 611G1614 11 4 4 1G1181100;;6158 N000 3ositive 101$G00G$000;4$G841G$700545$5;G18$00 1$ 87664$8418;$7004$000;4$G84 4G$00 01GG$0004$0004$1G000G5$G;41$0G65$810 8$ 601$000

75th 3ercentile N000

G1800G541070G$1541870000000

000110

-edian 00000000000 50000000000 N000

5th 3ercentile N000

000000000 1070

$6GG00000000 60

-inimum 68$000 1$04; 6$8;8 1$5;; 17$445 1$0000 4G$000 54G$7G6 18$00 N000 G$457 ; $0400 17400 118$000 158 ;4$G8 41$706 1$1G4

6$8;8 66

<() %"' G /G;=<() %"' 1;=<() %&#' G=<() %"' 1 =<() %"' G /G;=<() %"' 1;=<() %&#' G=<() %"' 1 =<() %"' G /G;=<() %"' 1;=<() %&#' G=<() %"' 1 =<() %"' G /G;=<() %"' 1;=<() %&#' G=<() %"' 1 =<() %&#' =<() %"' G /G;=<() %"' 1;=<() %&#' G=<() %"' 1 =<() %&#' =

&inancial instrumentsAm3lo/ee benexts.usiness combinations%ncome taxes&inancial instrumentsAm3lo/ee benexts.usiness combinations%ncome taxes&inancial instrumentsAm3lo/ee benexts.usiness combinations%ncome taxes&inancial instrumentsAm3lo/ee benexts.usiness combinations%ncome taxes'hare base 3a/ments&inancial instrumentsAm3lo/ee benexts.usiness combinations%ncome taxes'hare based 3a/ments

"ssets"ssets"ssets"ssetsCiabilitiesCiabilitiesCiabilitiesCiabilitiesA8uit/A8uit/A8 (ote* n O 56 uit/A8uit/#evenues/income#evenues/income#evenues/income#evenues/income #evenues/incomeAx3ensesAx3ensesAx3ensesAx3ensesAx3enses

Table %@. %m3act of () %&#' b/ xnancial statement element and accounting standard

!"# $

10

&urther anal/sis of Table %@ shows that the adjustments under () %"' G and G; <xnancial instruments= are the most fre8uent$ with GG 3er cent non-Jero observations affecting assets$ 1; 3er cent affecting liabilities$ G6 3er cent affecting e8uit/$ and 8 3er cent affecting net 3roxt <11 3er cent revenues and 17 3er cent ex3enses=. &urthermore$ the im3act is both 3ositive and negative$ but the 3ositive im3act is t/3icall/ more than twice as fre8uent as the negative im3act. These xndings are consistent with ex3ectations noted in Arnst K Loung < 004$ 3. 1= who 3redicted that xnancial instruments would be the H . . . area most heavil/ im3acted b/ the move to %&#'I. 1ung and 'ubraman/am < 007= re3ort a relativel/ infre8uent G 3er cent adjustment observations for xnancial instruments in their sam3le$ 16 3er cent of which were 3ositive. This is consistent with the results of .er,man et al. <1;;7=$ who xnd that (ew )ealand xrms are large users of xnancial instruments relative to 2' xrms. The signixcant increase in liabilities under () %&#' noted in Table %% can be attributed mainl/ to () %"' 1 %ncome Taxes. This standard increases liabilities in 4 3er cent of the observations$ decreases e8uit/ in 8 3er cent of the observations and increases assets in 16 3er cent of the observations. The im3act on current /ear 3roxts is$ however$ mixed with Table %@ showing both increases and decreases in ex3enses of 15 3er cent. The income tax adjustments for our sam3le are due mainl/ to deferred tax differences$ which arise because () %"' 1 ado3ts a Hbalance sheet a33roachI$ which is signixcantl/ different to the Hincome statement a33roachI formerl/ used under 9C5 B""!. +hile the inter-8uartile range for the im3act of () %"' 1 on e8uit/ is N .6 million the range is N;06 million. These results 3rovide an insight as to the variation in im3act of the deferred tax adjustments across the sam3le xrms$ as well as a reminder that these adjustments ma/ be both boo, value 4 increasing and decreasing. These xndings are consistent with the ex3ectation that the amount of deferred tax assets and liabilities re3orted in the balance sheet would increase <Arnst K Loung$ 004=. 9ur results reveal that the increases are considerabl/ larger and more fre8uent for liabilities than for assets. These xndings are also consistent with those of 1ung and 'ubraman/am < 007=. 1owever$ the/ re3ort fre8uencies of ;5 3er cent of observations affecting liabilities and 81 3er cent affecting net 3roxt. This su33orts the view that old () B""! is relativel/ closer to () %&#' than Berman B""! was to %"'. Am3lo/ee .enexts <under () %"' 1;= also contribute to the signixcant increase in liabilities under () %&#'. Ciabilities increase and e8uit/ decreases for 1 3er cent of the observations as a result of a number of new re8uirements under () %"' 1;. &or exam3le$ em3lo/ers are re8uired to recognise an asset or liabilit/ in res3ect of an/ em3lo/ee dexned benext 3lansE the/ are also re8uired to accrue for both vested and non-vested em3lo/ee benexts such as long service leave and sic, leave. 1ung and 'ubraman/am < 007= re3ort that em3lo/ee benexts are the second most fre8uent adjustment in their sam3le at 7 3er centE of which 67 3er cent result in negative adjustments for e8uit/. .usiness Dombinations increase e8uit/ and assets b/ 1G 3er cent and decrease ex3enses also b/ 1G 3er cent. These adjustments arise mainl/ as a result of the re8uirements in () %&#' G that goodwill should not be amortised$ but should be subject to im3airment testing. The 3redominance of increases in assets <and hence also in e8uit/= and decreases in ex3enses are consistent with ex3ectations ex3ressed in the Arnst K Loung < 004= re3ort. 1ung and 'ubraman/am < 007= re3ort similar results for their sam3le.

'hare-based 3a/ments are the last categor/ of adjustments$ which have non-Jero effects on 10 3er cent or more of our total sam3le. These adjustments affect onl/ ex3enses$ increasing them for 8 3er cent of observations and decreasing them for 3er cent of observations. The minimum and maximum values indicate that these adjustments are relativel/ small in com3arison to the other adjustments. 5.4 The effect of () %&#' on ,e/ ratios Table @ 3resents results of our anal/ses into the effect of () %&#' on ,e/ ratios$ which serve as 3roxies for variables that ma/ inxuence or be of interest to anal/sts. +e choose xve ,e/ ratios>4?* <1= return on e8uit/ <net 3roxt to e8uit/=E < = return on assets <net 3roxt to total assets=E <G= leverage <total liabilities to e8uit/= <4= asset turnover <revenue to total assets=E and <5= return on sales <net 3roxt to revenue=.

%&#' in (ew )ealand

10G

These ratios rexect the main ratios in the 5u !ont anal/sis>5?. 2nder () %&#' the median return on e8uit/ increases from ;. 3er cent to 11.; 3er cent <see !anel "=. #eturn on e8uit/ increases for 64 3er cent of observations and decreases for 5 3er cent of observations <see !anel .=. The change in this ratio is signixcant at the 0.01 level. The median return on assets increases from 4.7 3er cent to 5.0 3er cent <56 3er cent increase and GG 3er cent decrease=. The large im3act of () %&#' on liabilities has an effect on leverage. -edian leverage increases from 60. 3er cent to 6;.7 3er cent <64 3er cent increase and 4 3er cent decrease=. The differences for leverage are statisticall/ signixcant at the 0.01 level. The median for asset turnover decreases from 78.1 3er cent to 6;.5 3er cent rexecting the general increase in total assets under () %&#' <G0 3er cent increase and 57 3er cent decrease=. The median for return on sales increases from 5.8 3er cent to 6. 3er cent <66 3er cent increase and 5 3er cent decrease=. The differences for return on sales are statisticall/ signixcant at the 0.01 level. Table @ indicates$ xrst$ that the Hno-changeI effect of () %&#' on xnancial ratios is small <; to 1G 3er cent=. 'econd$ the im3act of () %&#' does not sim3l/ result in a uniform Hjum3I in xnancial statement ratios but has a xrm-s3ecixc effect. &or some xrms a 3articular ratio ma/ increase$ while for other xrms that ratio ma/ decrease. %n !anels D and 5 of Table @ we anal/se the changes in xnancial ratios resulting from the move to () %&#' for earl/ ado3ters and late ado3ters. The results are similar to !anel " in the sense that for most ratios the 3ercentage of ratio increases is almost alwa/s twice that of decreases. 1owever$ changes in return on assets$ leverage and asset turnover are not statisticall/ signixcant <at conventional levels= for earl/ ado3ters. &or late ado3ters the increase in leverage is signixcant at the 0.01 level. #eturn on e8uit/ and return on sales are signixcant for both earl/ and late ado3ters at the 0.05 level. %n general$ results are more strongl/ signixcant for late ado3ters than for earl/ ado3ters. +e 3erform a similar anal/sis <untabulated= on small and large xrms$ using the siJe criterion in section 5. . The trends for ratios discussed for !anel " hold for both the small and the large xrms$ but are more 3ronounced for the large xrms. The 3ro3ortion

!"# $

0.;01 #9' () %&#' 1;8.451 1;4. 18

566; .7180.007

56;6 .11G0.0G5

56510 .4G50.015

104

#9'9C5 B""!

"T9 () %&#' "T99C5 B""!

0.847 1$440.G56 1$440.4;G0.000 10$781. 70 10$781. 700.1;6 0.0 0 0.014 0.6;5 0.058 0.06 57G01G 1.47 .0640.0G; 0.1G5 0.1G8 .7 0 1.680 1.0461.17;0.0000. G10.7811.51 G.0G0 07.0G0 4641G 0.6771.1;8 6. 700.G770.6;71.1 G. 780.001 7; .670

6G 51G 0.65;0.510

55GG1G 1.1;G0. GG

CA@ () %&#' CA@9C5 B""!

76771.6010.10;

G6G15 .7680.006

0.6G71.114 6. 700.G100.60 1.1 8 .760 0.0;00.61 .10G0.G 0 G.850 0.0 G0.0500 GG5611 1.7G60.08G 76771.4750.140 G55G1G 1.0;70. 7

(otes* :e/ ratios are dexned as follows* #9A is return on e8uit/ which e8uals net 3roxt divided b/ boo, value of e8uit/E #9" is return on assets$ which e8uals net3roxt divided b/ total assetsE CA@ is leverage$ which e8uals total liabilities divided b/ boo, value of e8uit/E "T9 is asset turnover$ which is revenue to total assetsE#9' is return on sales$ which is net 3roxt to revenue. a ratios under 9C5 B""! and () %&#' are re3orted$ rather than the change to these ratios$ for ease ofreference to base xgures. b The re3orted test statistic is a +ilcoxon test for e8ualit/ of matched 3airs

#9" () %&#' #9"9C5 B""!

0.0;G0.567 G.G40 0.01G0.0470 .1160.G 0

#9A () %&#' #9A9C5 B""!

0. 501.401 17;.7G0

56411 .0500.0G00.11;0. .;;50.00G

07G71.;770.048

8601G .1;70.0 8

0.0851.561 5.5800.0 10.0; 0. G1;.7G0 !anel "* ratio com3arisons <all observations= a-ean'tandard deviation-inimum 5 3ercentile-edian75 3ercentile-aximum!anel .* number of changes and statistical tests<all observations= b5ecreases <P=%ncreases <P=(o change <P=) statistic3-value <two-tailed=!anel D* number of changes and statistical tests<earl/ ado3ters= b(egative <P=!ositive <P=(o change <P=) statistic3-value <twotailed=!anel 5* number of changes and statistical tests<late ado3ters= b(egative <P=!ositive <P=(o change <P=) statistic3-value <two-tailed=

Table @. 5escri3tive statistics on ,e/ ratios

of 3ositive sign changes are generall/ much higher for the large xrms than for the small xrms. +e xnd that the im3act of () %&#' on the small xrms is relativel/ insignixcant 4 onl/ asset turnover <at 0.05= and return on sales at <0.10= show signixcant change at conventional levels. This again contrasts strongl/ with the xndings for the large xrms$ where the im3act of () %&#' is found to be signixcant for all ratios exce3t asset turnover. #eturn on e8uit/ and leverage are signixcant at the 0.01 level$ while return on assets and return on sales are signixcant at the 0.05 level for the large xrms. These results are consistent with earlier xndings relating to xnancial statement elements$ indicating that small listed xrms are less signixcantl/ affected b/ () %&#' than large listed xrms. The results suggest that the im3act of () %&#' on ratios is both extensive and com3lex. "nal/sts will not be able to a33l/ a sim3le transformation of 9C5 B""! ratios to () %&#'. This has im3lications for the cost of xnancial anal/sis$ the cost of valuations and the use of ratios in contracting. &urthermore$ there are differences between earl/ and late ado3ters. This is consistent with earl/ ado3ters self-selecting based on xrm s3ecixc characteristics and the xnancial conse8uences of ado3tion.

%&#' in (ew )ealand

105

6. 'ummar/ and conclusion %n this 3a3er we examine the im3act of () %&#' on xnancial statement elements <assets$ liabilities$ e8uit/$ revenues/income and ex3enses/losses= and on ,e/ xnancial ratios. The results show that () %&#' affects 87 3er cent of entities in our sam3le and for most xnancial statement elements the changes are statisticall/ signixcant. The median and the inter-8uartile range indicate that the im3act of the move to () %&#' is$ for most entities$ ver/ small. 1owever$ the minimum and maximum values indicate that the im3act can be material for some com3anies. The xnancial statement element most affected b/ the move to () %&#' is liabilities <increases for 75 3er cent of com3anies=$ followed b/ e8uit/ <decreases for 57 3er cent of com3anies=. %ncome taxes and em3lo/ee benexts are the main reasons for the increases in liabilities. &inancial instruments are the most common reason for increases in assets < 6 3er cent of observations=. The/ im3act both 3ositivel/ and negativel/ on assets and liabilities. The net effects of these xnancial instruments im3acts are that observations for e8uit/ increase twice as fre8uentl/ as the/ decrease. The results are generall/ consistent with the ex3ected im3acts of %&#' <Arnst K Loung$ 004=. 1owever$ in some instances the/ differ from the im3act of %&#' in Berman/ <1ung and 'ubraman/am$ 007=. %n 3articular$ adjustments for xnancial instruments were more fre8uent in (). The move to () %&#' also has a considerable im3act on common xnancial statement ratios. The median for each of four ratios increases under () %&#' <return on e8uit/$ return on assets$ leverage and return on sales= and decreases for the remaining ratio investigated <asset turnover=. This has im3lications for xnancial anal/sis$ valuation and credit decisions and contracting agreements that em3lo/ accounting ratios. 9ur results are im3ortant for accounting 3olic/ ma,ers who have deferred the a33lication of () %&#' for smaller xrms <'eal/-&isher$ 007=. The/ indicate that some xrms will be signixcantl/ affected b/ the ado3tion of () %&#' 4 the current differential re3orting exem3tion for deferred tax$ for exam3le$ would therefore be a major concession if () %&#' were to be ado3ted b/ smaller xrms. 9ur results also indicate that small listed xrms are less signixcantl/ affected b/ () %&#' than large

!"# $

106

listed xrms. %f non-listed xrms are similarl/ affected$ it suggests limited benexts <relativel/ little change in xnancial information= as a result of smaller xrms moving to () %&#'. This 3ers3ective is relevant to the discussion documents recentl/ released b/ the -inistr/ of Aconomic 5evelo3ment < 00;= and the "'#. < 00;=$ regarding a 3ro3osed new statutor/ framewor, for xnancial re3orting in (ew )ealand and in 3articular to the -inistr/ of Aconomic 5evelo3ment < 00;$ 3. 1 = conclusion that H. . .the re8uirements to 3re3are xnancial statements should be removed for all but the 1- 3er cent of com3anies that are issuers$ large and/or do not have se3aration >of ownershi3 and management?I. &urthermore$ the im3act of () %&#' on xnancial ratios indicates that there is no sim3le transformation that will ma,e 9C5 B""! ratios com3arable with () %&#' ratios. This has im3lications for accountants$ advisors$ ban,ers and managers of xrms that are re8uired to ado3t () %&#'. &inall/$ our results show that the im3act of () %&#' on earl/ and late ado3ters is 8uite different. This suggests that earl/ ado3ters have self-selected and that future research might examine the causes and conse8uences of earl/ ado3tion. %t also suggests 3ossibilities for research that could reveal insights into accounting choices concerning %&#' ado3tion and their association with o33ortunism <including the 3ossibilit/ of earnings management= and value maximising behaviour.

(otes 1. %nternational "ccounting 'tandards <%"'= were signixcantl/ develo3ed and renamed after 001 to become %&#'. &or convenience$ we sim3l/ refer to %&#' to include both %"' and %&#'. +hen the context is more s3ecixc we use %"'. . The &#'. develo3s accounting standards which are then submitted to the "'#.$ a statutor/ bod/ that has legal authorit/ to review and a33rove the standards. G. This statement is re8uired in terms of () %&#' 1 &irst Time "do3tion of (ew )ealand A8uivalents to %nternational &inancial #e3orting 'tandards. 4. %t is normal to use A.%T <earnings before interest and taxation= in estimating return on assets. 1owever$ the 9C5 B""!/() %&#' reconciliations onl/ 3rovide details for net 3roxt. 1ence we are unable to estimate A.%T. 'imilarl/$ we are unable to estimate an "ltman-t/3e ) score model. 5. %n the 5u !ont anal/sis return on sales and asset turnover are com3onents of return on assets. #eturn on assets and leverage are com3onents of return on e8uit/. #eferences "ccounting 'tandards #eview .oard < 00;=$ H!ro3osed a33lication of accounting and assurance standards under the 3ro3osed new statutor/ framewor, for xnancial re3orting* discussion documentI$ "ccounting 'tandards #eview .oard$ +ellington$ 'e3tember. "ltman$ A. <1;68=$ H&inancial ratios$ discriminant anal/sis and the 3rediction of cor3orate ban,ru3tc/I$ 0ournal of &inance$ @ol. G$ 33. 58;-60;. .arth$ -.A.$ Candsman$ +.#. and Cang$ -.1. < 008=$ H%nternational accounting standards and accounting 8ualit/I$ 0ournal of "ccounting #esearch$ @ol. 46 (o. G$ 33. 467-;8. .er,man$ 1.$ .radbur/$ -.A. and -agan$ '. <1;;7=$ H"n international com3arison of derivative usageI$ &inancial -anagement$ +inter$ 33. 6;-7G. .radbur/$ -. <1;;8=$ H1armonising with overseas accounting standards* a (ew )ealand 3ers3ectiveI$ "ustralian "ccounting #eview$ (ovember$ 33. 18- G.

.radbur/$ -. and van )ijl$ T. < 006=$ H5ue 3rocess and the ado3tion of %&#' in (ew )ealandI$ "ustralian "ccounting #eview$ @ol. 16 (o. G;$ 33. 86-;4. Dhristensen$ 1...$ Cee$ A. and +al,er$ -. < 007=$ H5o %&#'/2:-B""! reconciliations conve/ new informationQI$ 3a3er 3resented at the ''#( eCibrar/$ available at* htt3*//ssrn.com/ 3a3erO;;7800 5as,e$ 1.$ 1ail$ C.$ CeuJ$ D. and @erdi$ #. < 008=$ H-andator/ %&#' re3orting around the world* earl/ evidence on the economic conse8uencesI$ 0ournal of "ccounting #esearch$ @ol. 46 (o. 5$ 33. 1085-14 . 5unstan$ :.C. < 00 =$ HThe case for the use of international xnancial re3orting standards in (ew )ealandI$ a briexng 3a3er 3re3ared on behalf of the (ew )ealand 'ecurities Dommission$ Dentre for "ccounting Bovernance and Taxation #esearch 'chool of "ccounting and Dommercial Caw @ictoria 2niversit/ of +ellington$ +ellington. Arnst K Loung < 004=$ %&#' %m3act #e3ort$ Arnst KLoung$ 'outham3ton. &ields$ T.5.$ C/s$ T.). and @incent$ C. < 001=$ HAm3irical research on accounting choiceI$ 0ournal of "ccounting and Aconomics$ @ol. G1 (os 1-G$ 33. 55-G07. 1ung$ -. and 'ubraman/am$ :.#. < 007=$ H&inancial statement effects of ado3ting international accounting standards* the case of Berman/I$ #eview of "ccounting 'tudies$ @ol. 1 (o. 4$ 33. 6 G-57. Cee$ A.$ +al,er$ -. and Dhristensen$ 1... < 008=$ H-andating %&#'* its im3act on the cost of e8uit/ ca3ital in Auro3eI$ (o. ##105$ "DD"$ -anchester. -inistr/ of Aconomic 5evelo3ment < 00;=$ HThe statutor/ framewor, for xnancial re3ortingI discussion document$ +ellington$ 'e3tember. 'eal/-&isher$ @. < 007=$ H&#'. develo3mentsI$ Dhartered "ccountants 0ournal of (ew )ealand$ @ol. 86 (o. ;$ 33. 45-6.

%&#' in (ew )ealand

107

Dorres3onding author +arwic, 'tent can be contacted at* w.j.stentRmasse/.ac.nJ

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