Food And Wine Harmony History Essay

Food And Wine Harmony History Essay Italy is a unitary legislative state in Southern Europe. It is the fifth most populated country in Europe, and the 23rd most populated in the world. Rome, the capital of Italy, has for periods been an administrative and religious centre of Western society as the capital of the Roman Empire and place of the Holy Sea. Modern Italy is an independent republic. It has been graded as the worlds 24th most-developed nation and its Quality-of-life Index has been graded in the worlds first ten in 2005.Italy delight in a very high standard of existing, and has a great GDP per capita. History The terrestrial known as Italy today has been the structure of European cultures and peoples, such as the Etruscans and the Romans. Italys capital, Rome, was for periods the administrative centre of Western society, as the capital of the Roman Empire. After its failure, Italy would endure numerous assaults by foreign peoples, from Germanic societies such as the Lombards and Ostrogoths, to the Normans and later, the Byzantines, among others. Times later, Italy would become the origin of the Renaissance, an immensely fruitful intelligent movement that would prove to be essential in shaping the following course of European thought. Through much of its post-Roman past, Italy was split into numerous kingdoms and city-states but was united in 1861, a unrestrained period in past known as the Risorgimento. In the late 19th era, through World War I, and to World War II, Italy controlled a colonial empire, which extended its law to Libya, Eritrea, Italian Somaliland, Ethiopia, Albania, Rhodes, the Dodecanese and a franchise in Tianjin, China. Culture Italy did not occur as a state until the countrys association in 1861. Due to this relatively late association, and the historical independence of the regions that include the Italian Peninsula, many societies and customs that are now predictable as distinctly Italian can be recognized by their districts of origin. Despite the governmental and social distinction of these areas, Italys contributions to the national and historical legacy of Europe and the world remain massive. Italy is home to the highest number of UNESCO World Heritage Sites to date, and has vast collections of art, culture and writings from many different eras. The country has had a comprehensive cultural impact worldwide, also because frequent Italians migrate to other places during the Italian movement. The country has, generally, an estimated 100,000 monuments Climate The climate differs significantly from the north to the south of Italy. In the north of the country the area in the middle of the Alps and the Tuscan-Milan Apennines the climate is tough, with very cold winters and very hot, mainly humid summers. In central Italy the temperature is milder, with a smaller difference in temperature between summer and winter and a smaller and less powerful cold season than in the north; summers are longer, but the sultriness of the northern metropolises is moderated by the sea. In southern Italy and the islands wintertime are never particularly tough, and spring and autumn climate are similar to those reached in the summer in other areas of Italy. Geography Italy is situated in Southern Europe and consist of the boot-shaped Italian Peninsula and a number of islands together with the two largest, Sicily and Sardinia. The Apennine Highlands form the peninsulas backbone and the Alps form its northern borderline, where Italys highest peak is positioned on Mont Blanc. The Po, Italys longest river, runs from the Alps on the western boundary with France and crosses the Padan plain on its manner to the Adriatic Sea. The country is located at the meeting point of the Eurasian Plate and the African Plate, primary to extensive seismic and volcanic movement. There are 14 volcanoes in Italy, four of which are energetic. Soil Soil differs throughout the world, and Italy has territory like no other. Both acidic and limy, Italian soils are used to harvest everything from vineyard grapes to routine herbs such as rosemary. Italy is renowned for wines due to its range of soil. Different grapes have need of different soils. Tuscany has such a various range of soil substances, together with volcanic rock and sandstone, that it is one of the finest places in Italy to catch fine wine vineyards. Marsala History In the 6th period to Justinians Empire, in this historical, the town was marked by dysentery, disregard of Bisanzio and the attacks of pirates. Arabic-Berbers arrival at the nearby Granitola mount in the 8th century involved the reopening of commerce and the start of the return of the town, which was retitled Marsa Ê ¿AlÄ « Ê ¿AlÄ «s harbour located near Punta dAlga or also Marsa Allah, namely Gods harbour, whence the existing name. There is the philosophy that Marsala comes from mare salis Salt ponds by the sea. At the end of era 1700, an appearance from the sea reformed again the upcoming of the town: the arrival of the English John Woodhouse who created the wine marsala. Geography Extreme western point of Sicily, the town was originated on Lilibeo cape, from where Aegadian Islands can be implicit. The territory of Marsala, extensive 241 km ² , has got a rich cultural and landscape legacy; its zone include the Stagnone Lagoon, where Mozia is situated. Marsala town till the end of 1970 was inhabited by about 86 thousand people. The part of Marsala is classified in seismic zone. In the last 200 years three earthquakes of medium-high strength were measured : 18 May 1828 magnitude 5.17 (about 6 ° Mercalli scale) 15 January 1968 Belice earthquake which in Marsala reached 7 ° Mercalli scale. 7 June 1981 magnitudo 4.60 (4/5 ° scala Mercalli scale) with epicentre in Borgo Elefante in Mazara del Vallo, far about 20 km from the town-centre of Marsala. Marsala wine Marsala wine is Italys most well-known type of fortified wine, addressing from Italys sunny southern area. Marsala is a upper alcohol fortified wine (usually about 17- 20%) that is existing in both sweet or dry variants. How is Marsala Wine Made? Marsala is complete from native, natural white grapes like Catarratto, The ruby-colored Marsalas hail from any mixture of three native red grapes. The fermentation of Marsala is frozen by the addition of a grape brandy when the remaining sugar satisfied reaches the pre-determined stages according to the sweet/dry style the creator is shooting for.   Alike to the system  of mixing various vintages of Sherry, Marsala often goes complete a perpetual system, where a sequence of vintage mixing takes place. Marsala Color Classifications: Ambra (Amber colored)   made with white grapes. Oro (Gold hues)   made with white grapes. Rubino (Ruby colored)   made with red grapes, like Pignatello. White grapes Chardonnay: This Burgundy diversity is so useful and commercially practical at the same time, that it was widely presented throughout Italy after the phylloxera defeated most Italian vineyards at the end of the nineteenth century. Produced in many flavours all over the country. Grillo: Full-bodied white used in Marsala and Alcamo blends between others. Zibibbo: Italian name for Muscat, or Moscato dAlessandria. Juicer, less fresh and more fermented than Moscato Bianco, it is best recognized for the passito wines from pantelleria, a small island off the western coast of Sicily. Sauvignon: Homonym of the French Sauvignon Blanc, it is completed into a number of variations throughout Italy. Catarratto Bianco Comune: Though it is found only in Sicily, this selection accounts for the most-planted white grape in all of Italy. Though it is usually used in variations of Marsala blends, it can be used to make pleasing, low-acid, dry wines. Red grapes Cabernet Sauvignon: Firstly from France, this grape is extensively grown all over Italy and has become the base for some of the most respected and luxurious Italian red wines. Similar to other unique French grapes such as Merlot and Cabernet Franc, it was widely established throughout Italy after phylloxera wiped out maximum of northern Italys vineyards at the end of the nineteenth century. Pinot Nero: The Italian variety of Pinot Noir is at its best in Piedmont, Oltrepà ² Pavese, plus Alto Adige wines. Sangiovese: Considered Italys most honourable red grape, it is the base for several prize-winning wines counting Chianti Classico, Vino Nobile di Montepulciano, Brunello di Montalcino, Morellino di Scansano and, last but not least, the gradually known Sangiovese di Romagna. It is measured a native wild vine that was major domesticated by the Etruscans in the Tuscan Emilian Apennines. It has a typical black cherry fragrance with scents of wood smoke. Nero dAvola: Also called Calabrese, is the most important red grape in Sicily. It is verified into dark, thick, flavourful reds reminiscent of the best Australian Shiraz. Gamay: Grown widely throughout Italy, it is vinified as Colli Del Trasimeno DOC varietal in Umbria Popular wineries in Marsala Alvis Rallo: A fine maker of Marsala wine, Alvis Rallo was started in 1860 by the Rallo family. The wine aged area has a capacity of around 13,000 hectolitres in oak casks having between 20 and 450 hectolitres each. Buffa Winery: The Buffa winery was started in 1931, the year in which the current owners father began to produce and trade Marsala wine in bottles, casks and bottles. Donnafugata: Donnafugata makes a range of wines counting Lighea Contessa Entellina D.O.C, Opera Unica Marsala Superiore Riserva D.O.C., Tancredi, and Vigna di Gabri Contessa Entellina D.O.Ces in Marsala Marsala wine Red wines include Nero DAvola: Nero DAvola is one of the ancient ethnic grapes and Marsala wine-makers are justly proud of the acknowledgment that this variety is now getting. Syrah: anyone aware with the southern hemisphere wines will have recognised plenty of Syrah and the weather and territory of Marsala are particularly suited to this tasty grape. Etna Rosso: a mixture of Nerello Mascalese and Nerello Mantellato this is the wine born on the rich, productive volcanic inclines of Mount Etna. Cerasuolo di Vittoria: a mixture of Frappato and Calabrese with the conceivable addition of some Grossonero or Nerello Mascalese, this is the well-known wine of the province of Ragusa. White wines include Bianco DAlcamo: a mixture of Cataratto Grecanico, Damaschino and Trebbiano, this outstanding white can be found all over Sicily, but can only be created in the rich area among Alcamo and Trapani. Wines prepared from Grillo, Inzolia, Cataratto, Grecanico and Chardonnay are made in purezza or mixed together by all the big wine creators, and some are truly excellent. Aperitif wines includeà ¢Ã¢â€š ¬Ã‚ ¦ The sugar content of the grapes and the drying abilities of the sun mean that Marsala gives itself well to manufacture of dessert wines. The best known of these are: Marsala: the famous fortified wine first created by the Englishman John Woodhouse in 1773 is a mixture of Grillo, Cataratto, Ansonia and Damaschino with the adding of distilled alcohol. Though it has a status as a sweet wine, there are also some outstanding dry aperitif varieties. Passito di Pantelleria: prepared from Zibbibo grapes which have been dehydrated in the sun to increase the sugar absorption. Passito di Noto: 100% Passito Bianco grapes for a pleasant sweetish wine, with sugar-coated hints. Viticulture Is the science, manufacture and study of grapes which contracts with the series of events that occur in the vineyard. As soon as the grapes are used for winemaking, it is also known as viniculture. It is a division of the science of horticulture. Duties of the viticulturist include: observing and directing pests and diseases, fertilizing, irrigation, shelter management, monitoring fruit growth and appearances, deciding when to harvest and vine cropping during the winter months. Vinification Winemaking, or vinification, is the manufacture of wine, starting with collection of the grapes or other food and ending with bottling the finished wine. While most wine is made from grapes, it may also be prepared from other fruits or plants. Mead is a wine that is prepared with honey being the primary ingredient after water. Winemaking can be distributed into two categories: still wine manufacture (without carbonation) and sparkling wine manufacture (with carbonation natural or injected).The science of wine and winemaking is known as oenology. A person who creates wine is usually called a winemaker or vintner. Food pairing The three most important rules when it comes to wine-and-food pairing are: 1. Drink and Eat What You Like Pick out a wine that you would need to drink by it, rather than hoping a food match will progress a wine made in a grace you dont like. That way, even if the pairing isnt good, you will still appreciate what youre drinking. 2. Look for Balance Study the weight-or body, or productivity-of both the food and the wine. The wine and the dish should be equal partners, with neither overpowering the other. If you stability the two by weight, you raise the odds intensely that the pairing will be successful. This is the secret behind many classic wine-and-food matches. Theres a fair quantity of character to this. Hearty food needs a hearty wine. Cabernet Sauvignon accompaniments grilled lamb chops because theyre equally strong. 3. Match the Wine to the Most Prominent Element in the Dish This is serious to fine-tuning wine pairings. Identify the main character more often it is the sauce, flavours or cooking method, rather than the main element. Consider two different chicken dishes: Chicken Marsala, with its browned exterior and a sauce of dark wine and mushrooms, against a chicken breast poached in a creamy lemon sauce. The browned, earthy flavors of the earlier tilt it toward a soft, supple red, while the simplicity and citrus flavors of the latter call for a fresh white. Examples of food with wine: Pinot Grigios are good with citric based foods like lemon chicken or light and floral soups or stews. If youre consuming a desert wine that is actual sweet, have a nice biscotti or torte. The wine should constantly be just as sugary, or sweeter Seafood does not constantly have to be matching with white wine. Chianti is such a assorted wine with a dry-body that it will not destruction and hide the flavors of the sea. Mix it up a bit and discover the flavors. Some shellfish, like oysters are outstanding with sparkling wine.

Anna Historic and Ravensong

Ana Historic is a poetic novel about a woman named Annie who discovers Mrs. Richards, a woman of no history, in Vancouver’s civic archives. Annie becomes obsessed with the possibilities of Mrs. Richards’ life. The novel is written by Daphne Marlatt, a Canadian poet. Ravensong is a fictional novel about a seventeen year-old native girl who tries to bridge the gap between the traditional ways of her Native village and white society’s invasive new values. Ravensong is written by Lee Maracle, a First Nations writer and poet. Both of these novels have brought forth important issues pertaining to Women’s and Gender Studies such as colonialism, sexuality, fear of violence, and lesbianism. This paper will focus on the topic of sexuality and colonialism. These two novels have further educated me on many things. For example, after reading Ana Historic, I discovered that there are various narrative forms and styles other than traditional European models. Daphne Marlatt uses writing styles such as ecriture feminine; in which feminist writers â€Å"try to use their own bodies as a source for writing† (Sand 10) and gynesis, which is an â€Å"aesthetic strategy which puts gender, sexuality and maternity into public discourse† (Sand 10). I also learned how femininity is constructed in a white middle class environment through what is considered appropriate conduct for a woman (Sand 10). After reading Ravensong, I discovered that in traditional aboriginal culture, men never entered the house of single women without a man being present (Maracle 103). This novel has also taught me about the important role of Raven, the trickster who is used to dissolve the boundaries between Native and white culture (Sand 20). The novels are very different in terms of narrative styles, point-of-views, time periods, and how lesbianism and the role of nature play out in the story. Daphne Marlatt uses a postmodern narrative style, while Lee Maracle uses a combination of aboriginal and European narrative approaches. Ravensong is written from the point-of-view of a young native woman, whereas Ana Historic is written from the outlook of a white, middle-class woman. Lesbianism plays out differently in each novel. In Ana Hisotric, Annie slowly comes to terms with her sexuality and eventually realizes that she is a lesbian. In Ravensong, Stacey’s friends Rena and German Judy are a lesbian couple. The role of nature in Ravensong is indivisible from human life and landscape (Sand 20), where as in Ana Historic it is a place of comfort and cause of fear (Sand 20). Ravensong takes place in the 1950s and Ana Historic takes place mostly in the 1950s and 1870s (Mrs. Richards). Colonialism and sexuality are topics which are closely correlated. They are both about dominance, regulation, discourse and race. Sexuality is defined as the historical organization and regulation of desire and sexual practices into social identities that are constructed as if they emerge from nature (Sand 18). Daphne Marlatt and Lee Maracle deal with this subject in very different ways. In Ravensong, sexuality is associated with shame and suicide. In Ana historic, sexuality is associated with mothering and lesbianism. Colonialism is the extension of a nation’s sovereignty over territory beyond its borders by the establishment of either settle colonies or creating administrative dependencies in which native or indigenous populations are directly ruled (Patel 8). Ravensong is written from the perspective of colonized people whereas Ana Historic is written from the standpoint of the colonizers. In the novel Ana Historic, Ina’s mothering impacts Annie’s perception of sexuality. Ina taught her daughters sexuality was something to be afraid of â€Å"you taught us your fear, you taught us what you knew about a world where even uncles were not to be trusted. you grew more afraid as our sexuality came budding to the fore†¦ † (Marlatt 34). Annie tries to write herself out of the patriarchal limitations of heterosexuality that have bounded her mother Ina to a life of domesticity. She does this by freeing herself from her role as supportive house wife and re-writing her relationship with Ina (Sand 10). Annie realizes that feminine behaviour is not actually something natural and inevitable but it is rather an unnatural social construction. Annie writes â€Å"†¦ you taught me the uneasy hole in myself and how to cover it up – cover girl, the great cover-story women inherit in fashion and makeup. You taught me how i was supposed to look, the feminine act† (Marlatt 61). Annie also recognizes â€Å"the inheritance of mothers† (Maralatt 60) that passes on sexual repression from generation to generation. For instance, Ina says to Annie, â€Å"what do you know about repression? you were hardly a virgin when you married, were you? I didn’t know the first thing about sex – your grandmother simply refused to discuss it, though i begged her† (Marlatt 60). Marlatt avoids heteronormativity which is a belief and a set of cultural/institutional practices that enforce heterosexuality as dominant, essential and natural (Sand 18), by creating a sexualized lesbian relationship between Annie and her friend Zoe. While creating a life for Mrs. Richards, Annie begins to realize that she is attracted to Zoe and she writes her into the story by creating a character named Birdie Stewart. Annie writes about the sexual desire she feels for Zoe in her imagined life of Mrs. Richards, â€Å"you turn intrigued, and your body turning in its long skirt, is caught in the act, you have caught yourself turning in Birdie’s eyes† (Marlatt 109). Annie’s inherent fear of sexuality surfaces in her imagined life for Mrs. Richard. Birdie recognizes Mrs. Richards fear of her own sexual identity, she says, â€Å"but you’re afraid my dear, afraid of your own twat† (Marlatt 135). She addresses her fear of lesbian sexuality when she says â€Å"You fear what you want. ’†¦ ‘am I right, my love? † (Marlatt 139). Mrs. Richards is suddenly rushed with desire, she admits the truth of it and feels it written across her face (Marlatt 139). Annie finally gives in to her sexual desire for Zoe and the novel ends with a climatic sexual poem. Annie’s lesbian sexuality surfaces as a result of the decolonization process Marlatt inscribes for Annie and Mrs. Richards (Sand 10). In her novel Narrative Deconstructions of Gender, Caroline Rosenthal defines sexual decolonization as a debate on whether â€Å"women are colonized by compulsory heterosexuality in ways only decolonizing strategies and the practice of critical consciousness can undo† (106). Marlatt deviates from the sexual oppression of middle-class white women by revisioning a lesbian life for Mrs. Richards. The problem of the intersection of women and the oppression of the indigenous briefly surfaces in Ana Historic. While Mrs. Richards is walking through the woods she comes across two Siwash men who are simply passing by. Where they drunk?†¦ Perhaps they were furious and meant to do her harm† (Marlatt 41). The assumptions that Mrs. Richards makes about these men are related to negative stereotypes such as the â€Å"drunken squaw† that colonizers created to justify taking over Native land (Anderson 229). In the beginning of the novel Ravensong, Stacey learns that one of her white classmates, Polly, committed suicide. Polly has killed herself in response to the shame she felt about being publicly identified as having been sexually active with another boy in Stacey’s class. Stacey becomes very angry with the reactions of some of her classmates to Polly’s â€Å"lack of chastity† (Maracle 28). â€Å"She couldn’t believe how small and mean they all were. So what if Polly had a little fun last night? Big deal! † (Maracle 28) Stacey does not understand the social disapproval of Polly because in her culture sexuality is seen with humour and is openly joked about. For example, Ella the village elder asks Stacey â€Å"What you going to save me for, have another baby? † The women respond with laughter saying â€Å"Sure, why not Ella. You probably still like trying. They were on a roll, ribbing Ella about her zeal for men† (Maracle 50). Raven pushes Stacey to come to grips with the loss of her classmate by guiding her to explore Polly’s culture and history. â€Å"Wander around Polly’s insides, feel your way through decades, generations of lostness† (Marlatt 39). In doing so Stacey discovers that white culture views sexuality very differently than her own culture. She realizes that Polly had a violent home life and that white town had no support for Polly’s mother. â€Å"In the end what struck her about Judy’s narrative was the lack of support in the white community for Polly’s mom. Where was the family in all this? † (Marlatt 81) Stacey is surprised by this because in her culture sexuality is natural, a part of everyday life. â€Å"People love, laugh and have babies† (Marlattt 71). In her thesis Rebelling against discourses of denial and destruction, Rachel Deutsch writes that â€Å"in European ideology, sexuality and sexual acts, especially involving women, were seen as deviant† (30). This ideology starts to influence Stacey to reject some aspects of her own culture such as the anger and disgust she feels towards her mother for wanting to remain sexual after the death of her husband. In Kim Anderson’s article, The construction of a Negative Identity, she states that colonizers created a negative sexual identity for Native women in order to justify â€Å"taking over Indian land† (229). The â€Å"dirty squaw† image made it easier to â€Å"cover up the reality of Native women who were merely struggling with the increasingly inhuman conditions on reserve† (Anderson 231). This negative sexual identity presents itself in the novel when Stacey talks about the racism she experiences at school. â€Å"A few of them hurled insults and racial epithets at her, whispered ‘cleutch’ as she passed them†¦ (Maracle 69). A cleutch refers to a Native female’s private parts. Colonialism first presents itself at the very beginning of the novel when Celia sees a tall ship approaching the village filled with men. In this moment, Celia feels the impending doom of colonialism on her people and culture. â€Å"Fear, cold and thin, wove itself into Celia’s self† (Maracle 10). Another instance of colonialism experienced by the village lies in the general indifference of white town towards the flu epidemic that takes many Native lives. Colonialism also surfaces in the relationship between Stacey and Steve, a white boy from her class. Colonialism led to the eradication and destruction of aboriginal cultures which assist in the explanation on why the doctors of white town were unwilling to treat the villagers. Stacey believes it is because their lives are deemed less valuable. â€Å"Under the shabby arguments about hospitals being full and doctors already overworked lay an unspoken assumption: white folks are more deserving†¦ † (Maracle 69). Stacey sees Steve and other white people as controlling oppressors. She resists white power (colonization) many times throughout the book. Stacey resists her teachers’ authority and she also resists Steve’s desire for her. â€Å"The slave had just given an order to the master, which made him an ex-master. Neither man knew what it was to be an ex-master, so both were confused and hurt† (Maracle 75). Her growing frustration for white town’s lack of compassion towards suffering villagers is obvious in her attitude towards Steve. Stacey can no longer stand the racism and she tells Steve exactly how she feels. She tells him that he will never know what her and her people have gone through and asks him â€Å"How did it feel to watch us die, Steve? † (Maracle 186). Steve leaves in shame and Stacey realizes that he was not for her. Ana Historic and Ravensong have taught me several things that I was unaware of before reading them. I have learned that there exists many different writing styles and narrative approaches such as ecriture feminine and gynesis used by Daphne Marlatt and the conventions of Native orature (Sand 20) used by Lee Maracle. I’ve learned how femininity is constructed in Ana Historic and about the important role that Raven plays in Ravensong. Marlatt and Maracle deal with colonialism and sexuality throughout the novel in a way which allows the reader to self-reflect on their own positions and understandings of these topics. Non-Native readers are removed from their usual hegemonic position by Stacey’s objectification of white town in Ravensong (Sand 20). Marlatt’s experimentation with language challenges the reader to both examine and interpret the world in a different way. What impacted me the most about Ana Historic is Daphne Marlatt’s theory and practice of fictionalysis which is a combination of fiction and analysis used as a means to explore self-identity. Marlatt starts with facts from her own life and from history and uses her imagination to create an intersecting territory where â€Å"fact and fiction co-exist† (Sand 10). I enjoyed how she used this style in Annie’s reconstruction of traditional history through the life she makes up for Mrs. Richards. The role that Raven plays in the novel is what impacted me most about Ravensong. Raven acknowledges the gulf between white town and the village and knows that it needs to be bridged in order to prevent further catastrophe. Raven brings the plague of the flu epidemic in attempt to expose white town to the diversity of the world and to teach them to work together. The inability of white town to grasp the lesson leads to the destruction of the indigenous community. Both novels bring important issues and concerns to women and gender studies and I really appreciate the different perspective that each novel has given me. Ana Historic and Ravensong have contributed important lessons, concepts and theories to this course.

The Effects Of Electrical Current On The Bacterial Bacteria

1.1 History In 1965 Barnett Rosenberg made the accidental discovery of the biological use cisplatin whilst conducting an experiment on the effects of electrical current on the bacterial E.coli (Escherichia coli). When the electrical current was turned on, it was observed that the cell division was inhibited causing a decline in the density of the bacterium. However, when the electrical field was turned off, the bacterium returned to its normal density. It was later found that the inhibition of cell division was not due to the electrical current but rather the production of cis- diamminedichloroplatinum (IV) from the platinum electrodes. The trans isomer of the compound was found to be inactive at low concentrations. Other group 10 metal complexes were tested and similar results, however the most effective remained to be the platinum complex. The discovery of this lead to the interest of testing these complexes for their anticancer behaviour. So the platinum (II), cis-[PtCl2(NH3)2], complex and the platinum (IV), cis-[PtCl4(NH3)2] were tested against the Sacroma 180 tumours of Swiss white mice. The complexes showed effective anticancer activity. The large solid tumours were shrunk and the mice lived and they were healthy. The study was so successful the mice even lived another 6 months without any signs of the cancer. This study was the basis in which cisplatin entered clinical trials and have now become one of the most successful anticancer drugs in medicine. 1.2Show MoreRelatedPotential Of Microbial Fuel Cells727 Words   |  3 PagesPotential of Microbial Fuel Cells A microbial fuel cell (MFC) is a device that converts chemical energy to electrical energy by the catalytic and metabolic reactions of microorganisms. The microorganisms function as a catalyst in the electron transfer between the electrodes. A MFC is just like any other fuel cell in its function which can undergo a half cell reaction. A typical microbial fuel cell consists of anode and cathode compartments separated by a cation (positively charged ion) permittingRead MoreDetecting Traces Of Antibiotics For Food Production1283 Words   |  6 Pagessensor recognizes these traces, it will notify the user of the approximate amount of antibiotic in their food, based off the quantity of traces found in the food. This device will be small and easily portable, which will help prevent the spread of bacterial resistance. The [Antibiotic Sensor Name] will have many health and economic benefits. Present Technology There are three main classes of detection of antibiotics in food products. The detection of antibiotics in food is an ambiguousRead MoreProgramming Bacteria To Sense Pressure Case Study1545 Words   |  7 Pages Programming bacteria to sense pressure Neydis Moreno and Megan N. McClean Pattern-generating circuits coupled to production of organic material with inorganic interfaces allow bacterial colonies to generate composite structures with unique function. Mother Nature generates sophisticated and complicated structures from the humblest of ingredients. Often their construction relies on the self-assembly of building blocks resulting in hybrid structures that combine both organic and inorganic materialsRead MoreThe Eco Cute644 Words   |  3 Pagesenvironment. Scientific community have stated different theories on the impacts of increasing concentrations of greenhouse gases, however the most notable of the theories is the increase in the average temperature of the Earths surface. The greenhouse effect is a natural process by which some of the radiant heat from the Sun is captured in the lower atmosphere of the Earth, thus maintaining the temperature of the Earths surface. Most manufactured chemicals, nitrous oxide, methane, and carbon dioxideRead MoreDental Implant Essay785 Words   |  4 Pages Novel Applications for Si-facilitated Dental Implant Osseointegration and Periodontal Guided Bone Regeneration: A Review of the Current Literature Silicon has been used as a crucial component of restorative-driven biomaterials in dentistry. However, the use of silicon for periodontally-driven therapies and dental implant treatment outcomes has not been explored as extensively -- as there are certain unique properties of this metalloid that are functionally plausible as an evident potential usefulRead MoreThe Type Of A Vector2332 Words   |  10 Pages2016). A plasmid is a relatively small circular piece of double stranded DNA found within bacteria (Kammermeyer et al, 1989). They are easy to work with as they are small in size and very stable. Within a plasmid there are three important sites as shown in figure 1 including the cloning region, antibiotics resistant gene and origin of replication. The antibiotic resistant site allows for choice of bacteria that contain the plasmid. In addition, the DNA within the vectors contain the genetic informationRead MoreUses And Function Of Carbon Nanotubes1029 Words   |  5 Pagesorbital s and the P orbitals unite creating an SP hybridised orbital, then making it strong and stable. This is illustrated in figure two showing the s and p orbitals. â€Å"In addition to their strength and elasticity, carbon nanotubes are 5 times the electrical conductivity, 15 times the thermal conductivity and 1 000 times the capacity of copper. Carbon Nanotubes are also known to be almost half the density of aluminium and because they are a carbon-based product, they have virtually none of the physicalRead MoreQuestions On Viruses Have Genetic Material Enclosed Within A Capsid3193 Words   |  13 Pagesas the cell undergoes mitosis, the DNA that was from the virus will be replicated as well as the hosts regular DNA. At first the bacteria is known as a bacteriophage but after it is incorporated into the genome of the new host it becomes known as a prophage. As the cell divides, the population of bacteria infected with prophage increases. Known as the â€Å"time-bomb† effect, a prophage from the lysogenic cycle goes into the lytic cycle. The lytic cycle is where the virus is actually made. The viral DNARead MoreBacterial Disease6531 Words   |  27 PagesBacterial diseases: Introduction Bacterial diseases include any type of illness or disease caused by bacteria, a type of microbe. Microbes are tiny organisms that cannot be seen without a microscope and include viruses, fungi, and some parasites as well as bacteria. The vast majority of bacteria do not cause disease, and many bacteria are actually helpful and even necessary to good health. Millions of bacteria normally live on the skin and in the intestines and can also be found on the genitaliaRead MoreAnalysis : A Glowing, Gone ! : Bacteria Transformation And Who Dunnit?1890 Words   |  8 PagesAustin, Mariya, Kaitlin Curran AP Bio 11 December 2014 Glowing, Glowing, Gone!: Bacteria Transformation and Who Dunnit?: Electrophoresis Analysis with DNA Purposes:  · Describe the process of transformation in bacteria  · Understand how to prepare viable E. coli cells  · Describe the components of gene transfer using plasmid vectors  · Be able to describe how antibiotic resistant genes are able to transfer, and identify the transformed cells that are

Creative Accounting - Free Essay Example

Sample details Pages: 24 Words: 7095 Downloads: 2 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Literature review on creative accounting: Fair value measurement on property, plant and equipment and investment property 1 Introduction As Blake and Lunt (2000, p.375) rightly surmise within their work on accounting standards, the term creative accounting, was originally coined by the media, and it was particularly prevalent around the time of the Enron financial disaster. It was partially because of the financial collapses of firms like Enron and the major debate that followed these events, that International Accounting Standards were introduced. Amongst the main objectives of these standards, which were intended to make financial statements easier to understand and provide for more transparency (Alfredson et at 2007, p.6), one of the aims was curtail future opportunities for creative accounting.. Don’t waste time! Our writers will create an original "Creative Accounting" essay for you Create order The IASB, when designing these standards started from the premise that corporate business had an obligation to account to investors, creditors and other stakeholder on a regular basis, usually within the annual financial statements, about the performance, situation and future prospects of that business (Alfredson et al 2007, p.4), which the focus being on the accuracy of this information. It thus sought to legalise this obligation and, through the standards, ensure that this result was achieved. However, despite the introduction of the standards and regulations, as Mulford and Comiskev (2002), Blake and Lunt (2000) have observed, irregularities in financial statements are still occurring. Many academic and professional observers are of the opinion that the measurements introduced by the IASB is serving to obscure concrete evidence in financial statements (Swanson and Miller 1989, p.1). In particular these concerns are centred around the boards movement away from historical cost accounting to a system of fair value accounting (Alfredson et al 2007, p.48), the introduction 4 of which was against the wishes of many stakeholders (Williams 2006). Fair value is intended to improve the accounting measurements used in financial statements by ensuring that these reflect relevant and current valuations of the business (Blake and Gowthorpe 1998, p.1). However, the argument against fair value, quite apart from the fact that it takes up an inordinate amount of management time (Scott 2003, p.2), is that it provides opportunity for manipulation and misuse and thus increases the potential for creative accounting. This is particularly prevalent in the area of asset valuation. The intention of this study is to investigate the arguments and debate that continues to surround the concepts and practices of creative accounting and the impact, if any, that fair value has had upon this issue. In particular, the study will concentrate upon these elements in relation to their use in the valuation of property, plant and equipment and investment property, which can in many companies, form a major part of their current balance sheet valuation. The objective is to assess and evaluate whether the introduction of the fair value concept has led to the intended improvement of financial reporting in these specific areas of the financial statements, or if creative accounting methods and processes are still being used to circumvent these improvements. It has been decided to conduct this research by using a literature review format. 2 Definitions, meanings and theories of creative accounting 2.1 Definitions and meanings Before being able to assess the extent to which the concept of fair value has impacted upon the reporting accurate values of assets in financial statements and the reduction of the prevalence creative accounting following the introduction of new standards and measurements, if any, it is important to understand the meaning and theories of creative accounting. Furthermore, understanding the reasons why these actions are being taken by so many corporate organisations is of equal relevance. Within the wealth of literature surrounding accounting and accounting standards, there are a wealth of diverse definitions for the term creative accounting Hey Cunningham, D (2002). For example, from an academic viewpoint Blake and Lunt (2000, p.375) define it as that which does not faithfully represent the underlying commercial activity and is therefore not neutral. Amat et al (1999, p.3) use even stronger terms to define creative ac counting, which they indicate is a process whereby accountants use their knowledge of accounting rules to manipulate the figures reported in the accounts of a business. As is perhaps to be expected, other stakeholders have been more forthright in their definitions and opinions. A business journalist, Ian Griffiths (quoted in Amat et al 1999, p.3), reveals the media view when he stated, Every set of published accounts is based on books which have been gently cooked or completely roasted commenting further that It is legitimate. It is creative accounting. An Investment analyst, Terry Smith, interviewed by the same authors (Amat et al 6 1999), also showed the level of concern felt about creative accounting in this segment of stakeholders. He commented, We felt that much of the apparent growth in profits which had occurred in the 1980s was the result of accounting sleight of hand rather that genuine economic growth. 2.2 Acceptance and reasons Acceptance levels and appropriateness in regards to the performance of creative accounting also show similar differences of opinions depending upon which particular stakeholder views are garnered. Whilst many say that manipulation, which is at the foundation of creative accounting, is an inevitability that cannot be addressed, whilst others believe that is the weakness of rules and measurements that allow this practice to continue (Langendijk et al 2003, p.31 and p.350). It is apparent that the media and investors support the latter of these opinions. However, according to a survey conducted by Amat et al (1999, p.13) as part of their research into creative accounting, the auditor profession not only believed that it was inevitable, with 91% of UK respondents believing that it could not be solve, but also over a third were of the opinion that it was a legitimate business tool. As indicated earlier, it is also felt that the introduction of the fair value concept as a measurement that would reduce the incidence of creative accounting is criticised as not being capable of fulfilling this role. The consensus is that this concept is expensive to implement, difficult to determine and verify, due mainly to objectivity characteristics, and is therefore easy for the opportunistic organisation to manipulate (Benston 12008, p.103). 2.3 Manifestation and methods of creative accounting Historically, creative accounting methods are used in a number of ways, all of which are designed to influence the financial statements and results produced by commercial organisations. Irrespective of whether these are directed towards the profit and loss account or balance sheet, all of these methods will have the effect of altering, or manipulating, the value of the business. One popular method is that known as income smoothing (Alfredson et al 2007, p.682). The objective of this method is to avoid the appearance of volatile changes in profit growth levels. For example, if a business moves from 1 million profit in one year to 2 million in the next, but it is expected that the third year profits would fall by 25% in comparison to year two, income smoothing may be implemented in this year. The smoothing effect is designed to show a more controlled and sustained level of growth The smoothing process can be achieved in a number of ways. One of the most obvious routes of achieving this situation is by the manipulation of provisions or accruals (Antill and Lee 2005, p.129). In the case described above increasing accruals or reducing debtors would have the desired effect of moving profit from the second year into the third, thus smoothing out the volatile look of the profit curve that previously existed. As some of these provisions are based upon estimations, manipulation is difficult to verify (Alfredson et al 2007, p.682). For example, within the financial statements of financial institutions such as banks, there is a requirement to provide for existing and potential bad debts. As an significant element of the bad debt provision calculation is based upon judgement, which can be biased, it is possible for these figures to be manipulated to show a more favourable position than might in reality be the case. Another method of manipulating the financial results is related to earnings management. In this case the management of the business will have a particular target in mind (Mulford and Comiskev 2002, p.15). One target might be to move earnings from one year to another with the specific intent of manipulating the profitability of the business for that particular year. An example of this is given in the research of Amat et al (1999), where they took an existing investment that had a historical cost of 1 million but a current value of 3 million. As the business managers in this situation have the freedom to choose exactly which year they can sell the investment and realise the profit, they have the ability to manipulate the financial statement results by their decision. Alternatively, sometimes a special one off charge may be included within the accounts, which will depress the profits and earnings. For example, if the payment of a lawsuit has been agreed to be completed over a period of years, it is possible that the management will decide to include all of these payments within one year. The management is then able to explain away part of the poor performance as result from this exceptional event. The difficulty is that, upon further examination of some exceptional items in corporate financial statement, it is often difficult to justify them being excluded from normal business operations. Therefore, it could be argued that they are, in effect, simply attempts to window dress the figures in an effort to put a more positive view on the results (Stolowy and Beton 2004). One element of earnings management that has proven popular with corporate management is the big bath scenario, which is seen by academics as an opportunistic method of creative accounting (Reidl 2004, p.823). The theory behind the big bath is particularly useful when an organisations management can foresee that the results for a current year are going to be poor. To limit the impact that this might have upon the future, and effectively to show that this situation will soon be reversed, management will seek to increase these losses. In other words, they will dump as much expense as they can into the bad year (hence the term big bath) so that the next years profit show a more significant improvement in the companys fortunes. Often this method of creative accounting will be used where there has been a change of management during the year. By affecting the big bath method, the new CEO is able to pass the blame for poor results onto the previous management team (Riahi-Belkaoui 2004 p.58). Of course, the manipulated improvement to the following years profits will have the benefit of improving the new teams reputation with investors and other stakeholders. Another example of creative accounting is apparent in the methods used by corporations to move items off balance sheet, particularly in the case of debt and financing (Pierce-Brown and Steele 1999, p.159). For example, where corporations sell property portfolios through a process of sale and leaseback, profits can be enhanced by manipulating the value of the portfolio. The downside of this process is that increases the rental amount but, the advantages are that this is spread over a number of years and, in addition, the increased values will have an immediate positive effect upon the current value of the business. In addition, companies are also afforded the ability through these processes to violate and circumvent debt covenants (Mulford and Comiskev 2002, p.91). As Pierce-Brown and Steele (1999, p.162) suggest, all it requires to achieve this situation is a change in the accounting policies put in place for the organisation. In a number of creative accounting methods described within this section, particularly those relating to fixed assets, the key element of the method is its reliance upon judgement. If corporations therefore wish to manipulate their results in any of these ways therefore, all they have to do is ensure that the judgement secured is biased in the direction they require (Alfredson et al 2007, p.259). With auditors, actuaries and other experts having differing standards by which they would estimate valuations, for example some would be more cautious than others, influencing financial results in a particular direction is not impossible to achieve. One of the concerns that have been expressed following the change to fair value is that, rather than reducing the opportunity for manipulation and creative accounting that previously existed, in certain areas this measurement has increased the potential. This is particularly seen to be the case in terms of business assets (Antill and Lee (2005) and Stolowy and Breton (2004)). For example, as with other areas of manipulation, the ability to be able to choose between some elements of asset valuations being based upon the historical cost basis, or using the fair value method of revaluation, this area can also be seen to have the potential of being influenced by biased judgements. 2.4 Purpose of creative accounting We have seen that the main result achieved from using the various methods of creative accounting is to change the revenue, earnings and value of the business, but the real question is for what purpose is being employed? In other words, which stakeholders does it benefit or disadvantage? The answer to these questions, as the literature being reviewed has indicated, the purpose of creative accounting has different objectives for each segment of stakeholders (Blake and Lunt 2000). Firstly, many academic have concentrated upon the effect and benefit that creative accounting might have for the one group of stakeholders who are closest to the corporate operations, which would be the management team. The salaries, bonuses and other rewards for most CEOs and senior management are linked to the performance of the business and, if these performance levels are not reached, the rewards will not be forthcoming. However, there is no negative impact on salaries related to the amount by which targets are missed, for example, whether the results are 1 million of 5 million below target salaries will remain the same. Therefore, if the CEO believes that in a particular year the business will not reach the required target, it is to his or her advantage to shift earnings from that year into the next in order to enhance and improve the potential size of future rewards (Investopedia 2008). Furthermore, as has already been indicated in the previous section, management earnings manipulation is also a useful tool in enhancing the reputation of the management team itself. In addition to the benefits available to a new CEO and team as outlined, it is also possible that the same process will be used by management teams exiting the business to improve their attraction to future employees (Riahi-Belkaoui 2004). In other words it is being used for self interest purposes by the management (Scott 2003, p.91). Wealth transfer is another popular reason for manipulation (Stolowy and Breton 2004). This is especially prevalent where there is a group situation with a number of subsidiary companies involved, where it is not difficult to manipulate the accounts by moving earnings or assets from one of the businesses to another. Such a scenario might be seen as favourable where part of the corporate assets, in terms of one of the group corporations, might be being groomed for possible tak eover or flotation. Furthermore, in the case of a multinational, this method of Creative accounting is useful in transferring wealth from a business located in one country to that operating in another national location. In this case it can be helpful in combating political pressure that might be being exerted to transfer wealth away from the corporation (Pierce-Brown and Steele 1999, p.161). Further evidence of manipulation for political purposes was examined in the work of Stolowy and Breton (2000, p.13). In this case they looked at this mode of creative accounting as related to corporations within the oil industry. What they found was that, during periods such as the Gulf War, which resulted in increased retail prices of fuel, these corporations adopted accounting policies that were designed to reduce their revenue. The purpose of this exercise was to limit the potential political consequences that might result from their organisations being seen to make higher profits during this period. Finally, and perhaps the most important reason for creative accounting methods, it is the impact that these changes have upon current and potential investors that is often the focus of these actions. Most academic and professional researchers and observers, including Tweedie and Whittington (1990), Antill and Lee (2006), Barker (2001) amongst others, see this purpose as being the prime objective of creative accounting. Manipulating revenues and balance sheet items, as well as earnings management are intended to present the corporation to the investor in a good and positive light, encouraging them to make and/or retain the investment (Stolowy and Breton 2000, p.10). These methods can also be used to have a positive impact upon investors decision making indicators, such as the P/E ratio (Barker 2001, p.2) and cash flow statements (Mulford and Comiskev 2002, p.354). One of the adverse problems of this manipulation process is that it also has an effect upon the accounting for risk (Babbel et al 2003, p.16) and this can affect a whole industry. A typical example of this happening in practice can be witnessed in the current credit crunch (2008). There are those who argue that the effects of this event were exaggerated because of the financial institutions propensity for manipulating bad debts. It can be argued therefore that, whatever the immediate benefits are of creative accounting, and irrespective of which stakeholders receive those benefits, at some future stage there is likely to be witnessed an adverse reaction that will eliminate the short-term benefits. Furthermore, as the current bank crisis has indicated, the potential losses from this future reaction can threaten the continued existence of the corporation. 3 Accounting measurements and controversial issues The international financial reporting standards, as indicated previously, were designed to reduce creative accounting. Two areas which were singled out for particular attention within this situation were the accounting standards to be used for the valuation of property, plant and equipment and investment property as these were seen as areas of the financial statements that have a significant influence upon the value of a corporation (IASB 2008). 3.1 Methods of measurements There have been a number of measurements used in the past to arrive at a realistic value for these assets. The most commonly used was the historical cost method. This method used the initial cost of the asset as a starting point and then, as it was used within the business, depreciated that asset over what was considered its useful life, often using what was known as the direct line method of depreciation or amortisation. Foe example, if a particular item of equipment cost 10,000 and its life expectancy within the firm was set at 5 years, that asset would depreciate at 2,000 per annum. However, as Mulford and Comiskev (2002, p.321) rightly observe, the drawback to this system is that it often does not correlate with assets whose value did not diminish predictably over time. In the case of the 10,000 item used above, it might be that, at the end of its useful life to the company it was sold for 2,500, which means that, if this is received at the end of the useful life period, profits for the business for that year were enhanced by this amount. The argument against this system is that during the course of the previous four years the true value of the asset was not being reflected in the financial statements and this had an adverse effect on the value of the firm (Blake and Lunt 2000). Another method of measurement that was used within some financial accounting environments was replacement value (Lindsell 2005). This method takes the cost of replacement as its marker for valuation rather than the historical price paid. It also relies upon the current value of the used equipment to provide a calculation of the difference. Using the example of the 10,000 asset as an example, if the replacement cost was 11,000 and the amount receivable should the used asset be sold is 9,000, there is a difference of 2,000 to be accounted for. This differential would effectively replace the depreciation reserve used within the historical cost method and was deemed by some to be more appropriate in that it reflected known values (Bens and Heltzer 2004). The only risk element in using this method is taking into account the judgement on the sale of the used asset. A further method of measurement was introduced that relied upon exit value. The basic concept of this method was that it used the sales value of the corporations assets (Barker 2001, p.87). The calculation of this value might for example, be used in the case of the business being acquired by another or its value upon failure. The difficulty with both of these situations is that unless either situation was imminent, judgements and estimations had to be used to assess these values. One issue that arose with exit value, particularly in respect of the valuation of assets such as property, was the inclination to undervalue the asset for tax reasons (Mulford and Comiskev 2002, p.131). Others have referred to the asset sale element of this measurement as the net realisable value (NRV). This takes into account the market for the asset, the maximum return likely to be achieved, then deducts the cost of transportation and other ancillary disposal costs before arriving at the NRV value (Van Zij i and Whittington 2006, p.3). Prior to the settlement on fair value as being the most appropriate measurements, one measure that most academics thought would be favoured by the Standard setters was the deprival value approach (Van Ziji and Whittington 2006, p.3.). The intention of this process was to determine the cost of the asset based upon the removal effect that it would have upon the business, in other words what cost would the business incur if it was deprived of that asset. As indicated, many academics thought this method would produce the accurate results. However, the professionals were not of the same opinion (Van Ziji and Whittington 2006) and, through the process of consultation and lobbying it was their voice that one the day. One has to wonder whether to threat to manipulation and creative accounting had any influence upon the decisions made by professionals. Fair value was the concept introduced with the introduction of the IASB standards and measurements. The intention of fair value is to ensure that the financial statements produced by a corporation are a true representation of the physical values that could be achieved for the business assets and liabilities should these be liquidated at the date those statements were submitted. In this respect it differs from the historical cost method in that the most important statement under fair value is the balance sheet rather than the profit and loss account (Penman 2007, p. 8-9). Similarly, it favours realism rather than the conservative approach that was apparent in some of the previous methods (Swanson and Miller 1989, p.93). As most academics and professional observers are agreed, fair value has now become the most popular choice of all the available methods used within financial reporting statements (Stolowy and Breton 2000, Bens and Heltzer 2004, Staff team 2004 and Blake and Lunt 2000). However, one of its main disadvantages is its subjectivity. Those opposed to this method argue that subjective valuations do not work when account objective values are what is needed (Penman 2007, p.14). Although some believe that fair value has a use for investors (Schroeder et al 2005, p.310), there are others that argue the lack of verifiability of the inputs necessary to implement such a system potentially adds noise and bias over and above the more traditional historical cost estimates (Bens and Heltzer 2004, p.2). Even the fact that, in appropriate instances, the fair value still allows corporations to use the historical cost approach, as is the case with some asset valuations, rather than reducing the concerns over this method, it is felt that the mixed measurement can do more harm to values (Swanson and Miller 1989, p.90 and p.160). One of the major elements of the subjective argument is that fair values relies upon expert judgements and opinions, and that bias or error could lead to increased volatility in financial statements (Barth 2006, p.323) and also reduce the ability to be able to compare results across a specific industry or range of industries (Staff team 2004). As Antill and Lee (2005, p.67), the fact that fair value is reliant in most cases to expert opinion and natural bias means that the estimations included within the financial statements may differ from the actual values received for the assets, a position that will not be realised until the sale has taken place. Therefore, from the literature reviewed it is true to say that, irrespective of its increasing popularity, issues remain to be addressed in respect of the fair value method (Alfredson et al 2007, p.48). As Barker (2001, p.148) indicates, although the intention of this process is either to ensure there is a genuine relationship between th e asset and the profitability of the corporation or, by indicating an overpayment eliminate its value, the current concerns relating to judgement and verification of values brings the practical implementation of these objectives into question. 3.2 IFRS standards and measurements In its introductory framework document to the IFRS standards, the IASB (2001) identified the four main characteristics of quality to be exhibited within financial statements as being understandability, relevance reliability and comparability. It further identified that the elements of the statements to be concentrated upon were: a) An asset is a resource controlled by the entity because of past events and from which future economic benefits are expected to flow to the entity. b) A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. c) Equity is the residual interest in the assets of the entity after deducting all its liabilities. in relation to the balance sheet and, in terms of the profit and loss account The elements of income and expenses are defined as follows: a) Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. b) Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities tha t result in decreases in equity, other than those relating to distributions to equity participants. In the early editions of the standards, references and definitions of the fair value method of measurement to be used were sparse. However, following consultations (IASB 2007 a and 2007 b), efforts were made to address this situation. This resulted in the creation of the following fair value definition: That fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arms length transaction (Van Ziji and Whittington 2006, p.6). The previous lack of guidance available was seen as a flaw in the standards (Alfedson et al 2007, p.7). This, together with the fact that the ISAB gave in to pressure from American corporations to give up on many of the changes that would have affected the asset of goodwill (Weil 2000 and Mard and Hitchner 2007), did not endear the system and standards to any experts, as continuing criticism from all sides has evidenced (Lee 2006). Both prior to and since the definition of fair value being introduced there has been strong criticism of the measurement systems and advice give for the need to resolve these issues (Tweedie and Whittington 1900 and Lindell 2005). Although regular consultations and improvements to the standards are ongoing, to date it is felt that the measurements still fail in their intention to increase transparency and comparability. This is particularly felt to be the case in terms of property, plant and equipment, and investment property, which will be discussed in th e following sections. 3.2.1 Measurements of property, plant and equipment The measurement and its definition relating to assets that belong within the group entitled as Property, Plant and Equipment are outlined within the summary of International Accounting Standard (IAS) 16. In this standard it defines the assets to be included in the financial statements in this section as being those which will produce a future economic benefit to the business. In terms of cost upon acquisition, the standard indicates that this will be calculated to include its purchase price and any other costs that are associated with transporting and installing the asset at the corporations premises. In relation to the measurement to be used in financial statements subsequent to the date of cost, the standard allows corporations to choose between the cost (historical approach) or the revaluation method (fair value) (IAS 16). The revaluation method requires an expert judgement of what the asset value would be at a given date. From this would be deducted any depreciation and impairment losses that had attached to the asset to the date of revaluation. It is also advised that this process should be carried out at regular intervals and certainly close to the date of the financial statements preparation. The fair value definition in this case is considered as being reliant upon the definition given in the previous section of this study (see page 19). 3.2.2 Measurements of investment property In many respects, for example, with the choice of measurements, the IAS 40 standard relating to investment property is similar to IAS 16. For example, in this case the choice is between: a) A fair value model, under which an investment property is measured, after initial measurement, at fair value with changes in fair value recognised in profit or loss; or b) A cost model. The cost model is specified in IAS 16 and requires an investment property to be measured after initial measurement at depreciated cost (less any accumulated impairment losses). An entity that chooses the cost model discloses the fair value of its investment property. The definition of investment property is considered to be property (land or a buildingor part of a buildingor both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather than for: a. use in the production or supply of goods or services or for administrative purposes; or b. sale in the ordinary course of business. (IASB 2008). It should be noted at this point that the fair value indicated within this IAS standard would incorporated the same revaluation process as was explained within the previous section regarding IAS. 3.3 Issues arising from IAS 16 and IAS 40 There are several issues arising from these standards that need to be discussed. One of the most obvious from an internal viewpoint arises from the need for regular revaluations to be carried out. Furthermore, within the small print of the standards it does require that if one asset within a particular class is revalued, all of the assets in that class have to be (Deloittes 2008). This process increases the financial and time cost to the corporation, which detracts from other duties. Secondly, there is the issue of a mixture in choice of measurements being used. With a combination of the two measurements in operation, this is seen by many academics as being confusing and unreliable (Schroeder et al 2005, p.45 and VanZiji and Whittington2006, p.4). Furthermore, this situation can have an adverse effect in terms of the comparability objective that the IASB were aiming for (Mirza et al 2006). For example, the ability to be able to compare investment opportunity is a specific industry sector is diminished if there is a wide variance in terms of the value measurements operative within the corporations operating within that sector. Furthermore, with results of investment portfolios fluctuating and the cost of similar assets showing different values because of measurements (Langdendijk et al 2003, p.250), the reliability factor of the standards from the investors viewpoint is seriously compromised (Nobes 2004). As Swanson and Miller (1989, p.2) acknowledged in their research of close to two decades ago, investors need to have an full understanding of the measurements being used and, at least to date, this understanding does not seem to be available through a simple format. In a situation such as these measurement, where one of the driving forces in to improve the relevance and clarity, as Healy and Wahlen (1999, p.366) stated, it is important that the measurements themselves have credibility. This is clearly not the case at present, and it is agreed with findings of Swanson and Miller (1989, p.206), until the IASB provide more clarity in terms of definition and interpretation regarding the standards they are set ting, matters will not improve (Jones 2006). Furthermore, in terms of creative accounting, the current situation is not a sufficient deterrent and therefore does not provide the confidence in the accuracy of the financial statements that was intended (Chorafas (2006, p.5) upon their introduction. There still exists the opportunity for earnings management intended to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers (Healy and Wahlen 1999, p.368). Company results being reviewed by investors and academics still show signs of manipulation, with the indication being, as the investor quoted earlier stated, that growth and decline in share value is being influenced by events that might have taken place earlier than the year being reviewed (Alciatore et al 2000 and King 2006). Academic studies that have taken place in countries outside of the UK (Kirschenheiter and Melumad 2002 and McLaney 2006), are confirming that the creative accounting methods, such as income smoothing, earnings management and the big bath process, are still being widely used. As indicated earlier, the impact of the credit crunch on bank financial statements can be seen to be further supporting evidence of this situation. According to recent report, the IASB in conjunction with the FASB are working together to further improve the fair value hierarchy (IASB 2007 a, and IASB 2007 b). This is focusing upon trying to deal with some of the issues being raised. In particular it has concentrated upon price of an asset or liability where no obvious market exists, suggesting that it should be valued as if that market does exist. However, as a correspondent to the Times (Letter 2008) commented, this appears to be a contradiction in terms. How can value something for which there is no formal foundation value available? If one concurs with the opinion expressed in literature, whether that is taken from the academic or professional stable, that fair value is at present subject to bias and manipulation, the question is how to address this problem. Does one call for a consensus of independent judgements to be made regarding fair value then use an average of these within the financial statements? This would have an adverse effect upon time and costs for the corporation. In the authors opinion it would be preferable for the relevant standard setters and accounting bodies to develop a system that does not have all the ambiguity and lack of direction that the present defining of fair value tends to encourage. 4 Conclusion As Amet et al (1999, p.15) research and survey showed, many within the accounting profession have produced what they consider to be justification for creative accounting. However, when one analyses these justifications the following two issues arise. Firstly, this approach appears to be at odds with the stated codes of practice of accounting bodies, which by definition does not include a rule that either encourages the concealing of manipulation or provide opportunity for it (Dean and Clarke 2007, p.98). Secondly, and perhaps more important is to consider who benefits. The majority of the beneficiaries from creative accounting are internal, being the business management. Therefore, the author would argue that, in view of the fact that corporate governance and accounting standards are designed to provide more transparency and give investors and other stakeholders a fair deal, which is the intention of fair value., the justifications given for creative accounting cannot be upheld. It is further concluded therefore, that there is a need for the regulatory bodies, such as the IASB, and the accountancy professionals, to work together to define international standards and measurements for fair value that achieve the objectives they were designed for. Perhaps once this have been achieved, the true owners of the business, these being the shareholders and the investors, will be able to be confident that the perceived value of their investment can be regarded as accurate. References Alciatore, M., P. Easton and N. Spear. (2000). Accounting for Impairment of Long-Lived Assets: Evidence from the Petroleum Industry. Journal of Accounting and Economics. Vol. 29, pp. 151-172. Alfredson, K., Leo, K., Picker, R., Pacter, P., Radford, J and Wise, V (2007). Applying International Financial Reporting Standards. Melbourne: John Wiley Sons Amat, O., Blake, J and Dowds, J (1999). The Ethics of Creative Accounting. Journal of Economic Literature. Andrews, R (2006). Impairment of assets: measurement without disclosure. Research Report No. 92. London: Chartered Accountants Educational Trust Antill, Nick and Lee, Kenneth (2005). Company Valuation Under IFRS: Interpreting and Forecasting Accounts Using International Financial Reporting Standards. London: Harriman House Publishing. Babbel;, D.F., Gold, J and Merrillm C.B (2003). Fair Value of Liabilities: The Financial Economics Perspective. The North American Actuarial Journal, Vol. 6, No. 1, pp. 12-27 Barker, R (2001). Determining Value: Valuation Models and Financial Statements. Harlow: Pearson Education Ltd Barth, M., W. Beaver and W. Landsman (2001). The relevance of the value-relevance literature for financial accounting standard setting: another view. Journal of Accounting and Economics 31: 77-104 Barth, Mary (2006). Fair Values and Financial Statement Volatility. London: International Accounting Standards Board Bens, D.A and Heltzer, W (2005). The Information Content and Timeliness of Fair Value Accounting: Goodwill Write-offs Before, During and After Implementation of SFAS 142. Chicago: University of Chicago Benston, G (2008). The shortcomings of fair-value accounting described in SFAS 157. Journal of Accounting and Public Policy, Vol. 27, pp.101-114 Blake, J and Gowthorpe (Eds.) (1998). Ethical Issues in Accounting. London: Routledge Blake, J and Lunt, H (2000). Accounting Standards. Harlow: Pearson Education Chorafas, D.N (2006). IGRS, Fair Value and Corporate Governance: The Impact on Budgets, Balance Sheets and Management Accounts. Oxford: Elsevier Publishing Dean, G and Clarke, F (2007). Indecent Disclosure: Gilding the Corporate Lily. Melbourne: Cambridge University Press Deloitte (2008). Summary of International Accounting Standards. Available from: https://www.iasplus.com/standard/ias16.htm (Accessed 2 September 2008). FASB (2007). FASB Statements of Financial Accounting Concepts. Chichester: John Wiley Sons Healy, P.M and Wahlen, J.M (1999). A review of the earnings management literature and its implications for standard setting. Accounting Horizons, pp. 365-383 Hey-Cunningham, D (2002). Financial statements demystified. London: Allen Unwin IASB (2007 a). Fair Value Measurement. Part 1: Invitation to Comment. London: IASB IASB (2007 b). Fair Value Measurement. Part 2: SFAs 157 Fair Value Measurements: Comments to be submitted. London: IASB ICAEW (2006). Measurement in Financial Reporting. London: Institute of Chartered Accountants in England and Wales IFRS (2008). International Financial Reporting Standards. London: IASB Investopedia (2008). Big Bath. Available from: https://www.investopedia.com/terms/b/bigbath.asp (Accessed 5 September 2008). ISAB Framework (2001). Framework for the preparation and presentation of Financial Statements. International Standards Accounting Board IASB (2006) Summary of International Accounting Standards. International Accounting Standard Boards. Retrieved 20 January 2007 fromhttps://www.iasb.org/Home.htm Jones, M (2006). Financial Accounting. Chichester: John Wiley Sons King, A.M (2006). Fair Value for Financial Reporting: Meeting the New FASB Requirements. New York: John Wiley Sons Inc., Kirschenheiter, M and Melumad, N.D (2006). Can Big-Bath and Earnings Smoothing Co-exist as Equilibrium Financial Reporting Strategies? Journal of Accounting Research. Vol. 40, Issue. 3, pp. 761-796 Langendijk, Henk., Swagerman, Dirk and Verhoog, Willem (eds) (2003). Is Fair Value Fair?: Financial Reporting from an International Perspective. Chichester: John Wiley and Sons Ltd. Lee, T (2006). Financial Reporting and Corporate Governance. Chichester: John Wiley Sons Letters (2008). Creative accounting is to blame for the crunch. London: The Times Lindsell, D (2005). How Fair is Fair Value. London: Ernst and Young Mard, M.J and Hitchner, J.R (2007). Valuation for Financial Reporting: Fair Value Measurement and Reporting, Intangible Assets, Goodwill and Impairment. New York: John Wiley Sons Inc McLaney, E (2006). Business Finance: Theory and Practice. Harlow: Pearson Education Mirza, A.A., Orrell, M and Holt, G.J (2006). Wiley IFRS: Practical Implementation Guide and Workbook. 2nd Edition. New York: John Wiley Sons Inc Mulford, C.W and Comiskev (2002). The Financial Numbers Game: Detecting Creative Accounting Practices. New York: John Wiley Sons Inc Nobes, C (2006). The survival of international differences under IFRS: towards a research agenda. Accounting and Business Research, Vol. 36, No. 5, pp. 233-245 Penman, S.H (2007). Financial reporting quality: is fair value a plus or a minus? Accounting and Business Research: Special Issue: International Accounting Policy Forum, pp. 33-44 Pierce-Brown, R and Steele, T (1999). The economics of Accounting for Growth. Accounting and Business Research, Vol. 29, No. 2, pp. 157-173 Riahi-Belkaoui (2004). Accounting Theory. London: Thomson Learning Riedl, E. J. 2004. An Examination of Long-Lived Asset Impairments. The Accounting Review. Vol. 79, pp. 823-852 Schroeder, R.G., Clark, M.W and Cathey, J.M (2005). Financial Accounting Theory and Analysis: Text, Readings and Cases. New York: John Wiley Sons Inc Scott, M.C (2003). Achieving Fair Value: How companies can better manage their relationships with investors. Chichester: John Wiley Sons Shah, A (1998). Exploring the influences and constraints on creative accounting in the United Kingdom. European Accounting Review, Vol. 7, Number1 1, pp. 836-104 Staff Team (2004). Fair Value Accounting and Financial Stability. European Central Bank. Occasional Paper Series, No. 13, April 2004. Retrieved 19 January 2007 from https://www.ecb.int/pub/pdf/scpops/ecbocp13.pdf Stolowy, H and Breton G (2000). A Framework for the classification of accounts manipulations. Available from: https://www.hec.fr/hec/fr/professeurs_recherche/upload/cahiers/CR708.pdf (Accessed 1 September 2008). Swanson, G.A and Miller, J.G (1989). Measurement and Interpretation in Accounting: A living System Theory Approach. Connecticut: Greenwood Press Tweedie, D and Whittington (1990). Financial Reporting: Current Problems and Their Implications for Systematic Reform. Accounting and Business Research, Vol. 21, No. 81, pp. 87- 102 Van Ziji, T and Whittington, G (2006). Deprival value and fair value: a reinterpretation and a reconciliation. Accounting and Business Research, Vol.36, No. 2, pp. 121-130 Weil, J (2000). FASB Backs Down on Goodwill-Accounting Rules. The Wall Street Journal, December 7, 2000, Page A2. Williams, Peter (2005). Accounting The next wave of convergence. Financial Director, 1 Feb 2005.