Showing papers on "Accounting period published in 2021"
16 Jun 2021
TL;DR: In this article, the authors quantify the extent of profit made by the commercial insurance companies born out of the premium after meeting up operating expenditures and claim settlements and how this profit evolves over time after being invested at the risk-free rate.
Abstract: Here, we argue that the commercial for-profit insurance companies act more like a memory-less system in a way that the premiums paid by the policy holders during one accounting period will be of no avail to them during subsequent periods, although the excess premiums earned in the previous periods may rest in the companies’ retained earnings. Moreover, commercial insurances are subject to many over-head costs, taxations and uncertainties which are not present in the realm of social insurances. As the costs and uncertainties are greatly reduced and the profits earned in the previous periods are available to meet present and future expenditures, social insurances entail a lower amount of premium for the policy holders than its conventional commercial counterpart. The objective of this study is to quantify the extent of profit made by the commercial insurance companies born out of the premium after meeting up operating expenditures and claim settlements and how this profit evolves over time after being invested at the risk-free rate. To us, this is the amount of money that would otherwise rest in a trust fund available for future claim settlement if there were equivalent social insurance schemes in place. To do so, we collect annual country-level data of premium collection, claim settlement and operating expenditure incurred for 04 (four) OECD countries from OECD insurance database (OECD in, OECD Insurance Database. https://stats.oecd.org/Index.aspx?DatasetCode=INSIND
. Accessed 27 Apr 2020, 2020a) and extrapolate the profit trends into the future using appropriate ARIMA/ARIMA–GARCH framework. As anticipated, the profit shows an explicit upward trend after making a V-shaped recovery right after the global financial crisis of 2008.
3 citations
DOI•
31 May 2021
TL;DR: In this article, the authors focus on normative accounting theory and positive accounting theory, and conclude that theory is often used as the basis for an action or practice, rather than accounting theory itself.
Abstract: This study aims to explain the definition rather than accounting theory, in this case, it is more focused on normative accounting theory and positive accounting theory. The author uses various sources, both from previous research journals and from articles on the internet. The conclusion of this research is that theory is often used as the basis for an action or practice. The development of accounting theory was initiated by the writings of Patton and Littleton (1940) entitled An Introduction to Corporate Accounting Standards. The result of normative accounting theory is a statement or proposition that requires or requires in accounting practice, normative accounting theory focuses on prescriptions (norms) and is not intended for theory development. While positive accounting theory seeks to explain and predict phenomena related to accounting. By using an approach that comes from positivism, empirical accounting research is developed to support and justify various accounting methods or practices in the real world. There are four periods of accounting theory, starting with the Pre-Theory period from 1492-1800. Then continued with the Pragmatic accounting period (general scientific period) from 1800-1955. The period 1956-1970 is labeled the 'normative period'. The last is the period of positive accounting theory from 1970 to the present.