Financialized accounts: Share buy-back, mark to market and holding the financial line in the S&P500

Tord Andersson; Colin Haslam; Edward Lee; N. Tsitsianis

doi:10.1016/j.accfor.2006.11.002

Financialized accounts: Share buy-back, mark to market and holding the financial line in the S&P500

Tord Andersson, Colin Haslam, Edward Lee, N. Tsitsianis

Hertfordshire Business School

Research output: Contribution to journal › Article › peer-review

8 Citations (Scopus)

Abstract

In recent years the US corporate sector has deployed more cash from operations to finance the repurchase of outstanding share capital for treasury stock. Shares repurchased for treasury stock can help flatter earnings per share, fund senior management share option compensation schemes and finance corporate acquisitions. In financialized accounts these are now significant transactions which, it is argued, serve the financial interests of managers and investors.
The US Financial Accounting Standards Board (FASB) is now demanding a “greater use of fair value measurements in financial statements” with the result that share options and corporate acquisitions will be “marked to market”. This will force a financialized ratchet because managers in the S&P 500 will need step up cash extraction if they are to hold the financial line

Original language	English
Pages (from-to)	165-178
Number of pages	12
Journal	Accounting Forum
Volume	31
Issue number	2
Early online date	19 Dec 2006
DOIs	https://doi.org/10.1016/j.accfor.2006.11.002
Publication status	Published - Jun 2007

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title = "Financialized accounts: Share buy-back, mark to market and holding the financial line in the S&P500",

abstract = "In recent years the US corporate sector has deployed more cash from operations to finance the repurchase of outstanding share capital for treasury stock. Shares repurchased for treasury stock can help flatter earnings per share, fund senior management share option compensation schemes and finance corporate acquisitions. In financialized accounts these are now significant transactions which, it is argued, serve the financial interests of managers and investors. The US Financial Accounting Standards Board (FASB) is now demanding a “greater use of fair value measurements in financial statements” with the result that share options and corporate acquisitions will be “marked to market”. This will force a financialized ratchet because managers in the S&P 500 will need step up cash extraction if they are to hold the financial line ",

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AU - Tsitsianis, N.

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AB - In recent years the US corporate sector has deployed more cash from operations to finance the repurchase of outstanding share capital for treasury stock. Shares repurchased for treasury stock can help flatter earnings per share, fund senior management share option compensation schemes and finance corporate acquisitions. In financialized accounts these are now significant transactions which, it is argued, serve the financial interests of managers and investors. The US Financial Accounting Standards Board (FASB) is now demanding a “greater use of fair value measurements in financial statements” with the result that share options and corporate acquisitions will be “marked to market”. This will force a financialized ratchet because managers in the S&P 500 will need step up cash extraction if they are to hold the financial line

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JO - Accounting Forum

JF - Accounting Forum

IS - 2

ER -

Financialized accounts: Share buy-back, mark to market and holding the financial line in the S&P500

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