Table Of ContentCorporate Financial Reporting and Performance
DOI: 10.1057/9781137515339.0001
Other Palgrave Pivot titles
Olli Pyyhtinen: More-than-Human Sociology: A New Sociological Imagination
Jane Hemsley-Brown and Izhar Oplatka: Higher Education Consumer Choice
Arthur Asa Berger: Gizmos or: The Electronic Imperative: How Digital Devices have
Transformed American Character and Culture
Antoine Vauchez:Democratizing Europe
Cassie Smith-Christmas: Family Language Policy: Maintaining an Endangered Language in
the Home
Liam Magee: Interwoven Cities
Alan Bainbridge: On Becoming an Education Professional: A Psychosocial Exploration of
Developing an Education Professional Practice
Bruce Moghtader:Foucault and Educational Ethics
Carol Rittner and John K. Roth: Teaching about Rape in War and Genocide
Robert H. Blank:Cognitive Enhancement: Social and Public Policy Issues
Cathy Hannabach:Blood Cultures: Medicine, Media, and Militarisms
Adam Bennett, G. Russell Kincaid, Peter Sanfey, and Max Watson: Economic and Policy
Foundations for Growth in South East Europe: Remaking the Balkan Economy
Shaun May: Rethinking Practice as Research and the Cognitive Turn
Eoin Price:‘Public’ and ‘Private’ Playhouses in Renaissance England: The Politics of
Publication
David Elliott: Green Energy Futures: A Big Change for the Good
Susan Nance: Animal Modernity: Jumbo the Elephant and the Human Dilemma
Alessandra Perri:Innovation and the Multinational Firm: Perspectives on Foreign
Subsidiaries and Host Locations
Heather Dubrow: Spatial Deixis in the Early Modern English Lyric: Unsettling Spatial
Anchors Like “Here,” “This,” “Come”
Felicity Callard and Des Fitzgerald: Rethinking Interdisciplinarity across the Social Sciences
and Neurosciences
Catrin Norrby and Camilla Wide:Address Practice AS Social Action: European Perspectives
DOI: 10.1057/9781137515339.0001
Corporate
Financial Reporting
and Performance:
A New Approach
Önder Kaymaz
Associate Professor of Accounting,
Central Connecticut State University (CCSU), USA
Özgür Kaymaz
Financial and Administrative Affairs Manager, Training
Directorate, Turkish Airlines Inc., Turkey
and
A. R. Zafer Sayar
CEO, The Union of Chambers of Certified Public
Accountants of Turkey: TURMOB (AICPA-Equivalent)
DOI: 10.1057/9781137515339.0001
© Önder Kaymaz, Özgür Kaymaz and A. R. Zafer Sayar 2015
SS oo ff tt cc oo vv ee rr rr ee pp rr ii nn tt oo ff tt hh ee hh aa rr dd cc oo vv ee rr 11 ss tt ee dd ii tt ii oo nn 2015 978–1–137–51532-2
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
No portion of this publication may be reproduced, copied or transmitted
save with written permission or in accordance with the provisions of the
Copyright, Designs and Patents Act 1988, or under the terms of any licence
permitting limited copying issued by the Copyright Licensing Agency,
Saffron House, 6–10 Kirby Street, London EC1N 8TS.
Any person who does any unauthorized act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this work
in accordance with the Copyright, Designs and Patents Act 1988.
First published 2015 by
PALGRAVE MACMILLAN
Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills, Basingstoke,
Hampshire RG21 6XS.
Palgrave Macmillan in the US is a division of St Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN: 978–1–137–51533–9 PDF
ISBN: 978–1–349–70332–6
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Names: Kaymaz, Önder, 1977– | Kaymaz, Özgür, 1974– | Sayar, A. R. Zafer.
Title: Corporate financial reporting and performance : a new approach /
Önder Kaymaz, Assistant Professor of Business, Izmir University of
Economics, Turkey, Özgür Kaymaz, Financial Manager, Training
Directorate, Turkish Airlines Inc., A. R. Zafer Sayar, CEO, Union of
Chambers of Certified Public Accountants of Turkey.
Description: New York : Palgrave Macmillan, 2015. | Includes index.
Identifiers: LCCN 2015037747 | ISBN 9781137515322 (hardback)
Subjects: LCSH: Financial statements. | Corporations – Accounting. |
Corporation reports. | BISAC: BUSINESS & ECONOMICS / Accounting /
Financial. | BUSINESS & ECONOMICS / Finance.
Classification: LCC HG4028.B2 .K39 2015 | DDC 657/.3—dc23
LC record available at http://lccn.loc.gov/2015037747
www.palgrave.com/pivot
doi: 10.1057/9781137515339
This book is dedicated to my mother,Mavis, and my father,
Hazim. They have always believed in me and have supported
me as much as they could have, no matter what. This voyage
started with them, like many other things in my past. And
this book is dedicated to Beste, my unique and beloved wife,
the source of my ever-lasting happiness, the woman I am in
love with, and the mother of my future children, with whom
this voyage has been nourished, has matured and has finally
been completed. All of them have done their best, and their
contributions are literally priceless.
Önder Kaymaz
Creative work might sometimes begin as way of escaping the
hustle and bustle of daily life, which directs individuals in
routines. The efforts dedicated to such demanding adventures
require the solid patience and support of family members. I
kindly ask all my family members to forgive me for paying
insufficient attention to them because of my need to finish
this difficult work.
Özgür Kaymaz
I would like to thank Dr Masum TURKERR, who is a Board
Member at the IFAC, and Mr. Nail SANLI, who is the
President of the Union of Chambers of the CPA of Turkey
(TURMOB), for motivating me to undertake this work. I
would also like to thank my beloved wife, Nihal, and my
unique daughters, Idil and Itir, for their patience and self-
sacrifice as I created this work.
A. R. Zafer Sayar
DOI: 10.1057/9781137515339.0001
Contents
List of Illustrations viii
Acknowledgements x
About the Authors xi
1 Introduction 1
1.1 Background 2
1.2 Objectives 6
1.3 Organization & structure 8
2 Theory and Analysis 10
2.1 The framework & the relevance
of corporate earnings 11
2.2 The setup 14
3 GING and Corporate Earnings 16
3.1 Concealed gains 17
3.2 The concept of treasury loss 19
4 The Model 30
4.1 Business case: resolving
measurement issues 38
5 Applications 43
5.1 Learning from game theory 44
5.2 Learning from international
corporate financial reporting:
a special look at IAS 12 56
vi DOI: 10.1057/9781137515339.0001
Contents vii
6 Conclusion 73
6.1 Concluding remarks, implications and suggestions 74
6.2 Limitations and future research 76
Bibliography 78
Index 80
DOI: 10.1057/9781137515339.0001
List of Illustrations
Figures
2.1 Principal and agent setup 14
4.1 Derivation of an own-price demand curve
by the dominant firm as the market/industry
price setter 32
4.2 Profit maximization by the dominant firm
over the short term as a price setter 36
4.3 Transaction setting: the dominant firm
(price leadership) model 39
Tables
2.1 The major assumptions underlying the
setup 15
5.1 Comparison of the financial highlights of
two financing options for SKYHIGH: bond
versus share issue 45
5.2 Balance sheet effects: bond issuance 46
5.3 Balance sheet effects: interest accrual
following bond issuance 47
5.4 Income statement effects: interest accrual
following bond issuance 48
5.5 Balance sheet effects: share issuance 49
5.6 Comparison of the financial highlights of
two financing options for SKYHIGH: note
issue vs. financial leasing 50
5.7 Balance sheet effects: note issuance 50
viii DOI: 10.1057/9781137515339.0002
List of Illustrations ix
5.8 Balance sheet effects: interest accrual following
note issuance 51
5.9 Income statement effects: interest accrual following
note issuance 51
5.10 Balance sheet effects: financial leasing 52
5.11 Balance sheet effects: interest accrual following financial
leasing 53
5.12 Income statement effects: interest accrual following
financial leasing 53
5.13 Principal-agent framework under game theory: No-Nash
solution: GING 54
5.14 Principal-agent framework under game theory: Nash
solution: preclusion of any GING 56
6.1 A legend on how to implement deferred taxes 76
DOI: 10.1057/9781137515339.0002
