The design or reorganization of a corporate organization should be discussed from the perspective of the supply and demand equilibrium in the market. But it is quite difficult to balance supply and demand by relying on the price mechanism of the market. The book investigates the impact of a takeover on a management's incentives to increase reported earnings. The book also analyzes the type of effects reorganizations have on the laws and regulations, while weighing the company law, accounting standards for financial instruments, tax law, other accounting principles and international standards such as the Financial Accounting Standards Board (FASB) and International Financial Reporting System (IFRS). Proposing a new institutional fundamentalism based on the merits of market competition, the book clarifies the features of public-to-private buyout in Japan, explaining the advantage of going-private transactions. The trend of public-to-private buyouts in Japan and the theoretical framework of public-to-private buyout deals are also dealt with in detail.
Author(s): Yasuyoshi Kurokawa
Year: 2009
Language: English
Pages: 152
Japan Society of Organization and Accounting......Page 6
Editorial Board......Page 8
Contents......Page 10
List of Contributors......Page 16
1 Introduction......Page 18
2 The Present Conditions of M&A Accounting in Japan: Stepping toward International Harmonization......Page 19
3 The Revision of the Accounting Standards for Business Combinations: Toward Convergence......Page 26
3.2 Revised M&A accounting standards (established in 2009, will be enforced in 2010)......Page 28
4 Reexamination of Governance Based on Stockholder Dominance......Page 30
5 Conclusion......Page 32
References......Page 33
1 Prior Studies Concerning the Reasonability of the Adoption of the Free Cash Flow Method......Page 34
2 Corporate Evaluation of Business Combination Accounting and PPA......Page 35
3 Revaluation in the Case of Share Transfer of Daiichi Sankyo Company Limited......Page 36
4 Verification of Reasonability of Accounting for Goodwill......Page 38
5.1 M&A and motive for innovation......Page 40
5.2 Examination of reasonability of appropriation......Page 42
6.2 M&A of Eisai Co. Ltd. and Takeda Pharmaceutical Co. Ltd.......Page 46
6.3 Direction of in-process R&D expenses......Page 47
7 Conclusion......Page 48
Notes......Page 49
References......Page 50
1 Introduction......Page 52
2 Earnings Management and Takeovers......Page 54
3.1 Measurement of earnings management......Page 55
3.2 Sample......Page 57
4.1 Descriptive statistics......Page 59
4.2 Abnormal accruals for acquiring firms around the agreed-on exchange ratio of the merger......Page 62
4.3 Abnormal accruals for target firms around the agreed-on exchange ratio of the merger......Page 64
5 Conclusion......Page 67
References......Page 68
1 Potential Inventory Manipulation......Page 70
2.1 Discretionary accruals: the modified DJmodel......Page 71
2.2 Discretionary day’s inventory......Page 72
3.3 Hypothesis 2: discretionary day’s inventory
change (DINV/S or DINV/C)......Page 73
4.1 Data......Page 74
5.1 Comparison of the positive CFO Group with
the negative CFO Group in the discretionary
accruals......Page 75
5.2 Comparison of the positive CFO Group with
the negative CFO Group in the discretionary
day’s inventory change based on sales......Page 78
5.3 Comparison of a positive CFO Group with a negative CFO Group in the discretionary day’s inventory change based on cost of goods sold......Page 80
6 Conclusion......Page 81
References......Page 82
1 Research Purpose......Page 84
2 What is the Network Organization?......Page 85
2.1 Boundaries of the inter-firm network as an open adaptive system......Page 86
3 The Concept that Makes the Network Organization Unique......Page 87
4 Three Roles of the Core Company in a Network Organization......Page 88
5 Strategic Decision No. 1: Selection of Network Participating Companies Through M&A......Page 90
6 Strategic Decision No. 2: Design of Forms of the Inter-Firm Combination......Page 91
6.1.2 Control right: origin of synergy effect......Page 93
6.2 Placing a company under control as an affiliate......Page 95
6.3 Capital alliance......Page 96
6.4 Business tie-up (operational alliance)......Page 97
6.5 Market transactions......Page 98
7 Design of an Incentive System for the Companies Participating in a Network......Page 99
Notes......Page 102
References......Page 106
1 Introduction......Page 108
2.1 Causes of inefficiency of the market......Page 109
2.2.1 Efficient market and behavioral finance .......Page 110
2.2.2 Knowledge in behavioral finance......Page 111
2.3 Cross-shareholding among Japanese firms......Page 112
3.1 Determination of TOB price and its effect......Page 113
3.2 Strategies for successful TOB......Page 114
4 A TOB Case in Japan......Page 116
5 Concluding Remarks......Page 118
References......Page 119
2 Trends of Public-to-Private Buy-outs in Japan......Page 120
3.1 Divestment type......Page 121
3.2 Business succession type......Page 122
3.4 Strategic going private type......Page 123
3.5 Protection against hostile takeover type......Page 124
5 Conclusion......Page 125
References......Page 133
1 Introduction......Page 134
2 The State of the M&A Market in Japan......Page 135
3 Do M&As in Japan Increase Shareholder Value?......Page 137
4 Factors Behind the Value Creation by M&A Activities......Page 140
5 Long-Term Shareholders’ Return after M&As in Japan......Page 144
6 Conclusion......Page 146
References......Page 148
Index......Page 150
