Browsing by Author "Aapasuo, Oskari"

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Financial Accounting in Inflationary Economies and IAS 29
(2023) Aapasuo, Oskari
School of Business | Bachelor's thesis
In the past few years, we have seen a global spike in inflation that hadn’t been seen since the 1970’s and 80’s. This has raised inflation into a major topic of interest. In this thesis I will be looking into the effects of high inflation on financial accounting. The objective of this thesis is to investigate the modern-day applications, history, relevance and usefulness of International Accounting Standard 29 – Financial Reporting in Hyperinflationary Economies. The method used is a literary review with real examples taken from companies’ financial statements. There is no definitive definition for hyperinflation, but IAS 29 considers a cumulative inflation of 100% over three years as one of the characterizations of hyperinflation. This would mean an annual inflation rate of about 26%, which is considerably low compared to other definitions of hyperinflation. Even several developed economies had inflation rates that peaked not far from 26% in 2022. However, despite there currently being 12 jurisdictions that according to the International Accounting Standards Boards should be considered hyperinflationary, IAS 29 is widely used only in Zimbabwe. The main findings of this thesis are that prior research is inconclusive in answering if inflation-adjusted financial figures are more value relevant than historical cost ones, with research from different economies at different times giving different results on the matter. Historical cost figures were found to be more used by analysts and directors; they were also better at predicting future free cash flows. Most research seem to suggest that inflation-adjusted figures and historical cost ones should be considered complimentary instead of exclusionary. This is also the way publicly listed companies in Zimbabwe present their financial statements. This is in conflict with the IAS 29 guidelines, which discourage the publishing of historical cost figures.
Pay-performance sensitivity of granted compensation in Danish publicly listed companies
(2025) Aapasuo, Oskari
School of Business | Master's thesis
This thesis studies the pay-performance sensitivity of granted compensation to CEOs in Danish publicly listed companies between the years 2018 and 2023 using data from publicly available remuneration reports. The thesis also aims to answer if there occurred any decreases or increases in pay-performance sensitivities during years of crisis, which in this thesis are defined as the years 2020 and 2021 when the effects of the Covid-19 pandemic hit society. The main method of analysis is using regression analyses. More traditionally, pay-performance sensitivity is measured based on exercised values instead of granted values, which needs to be considered when interpreting the results. Additionally, a number of company and CEO characteristics were considered to examine how these impact compensation amounts and pay-performance sensitivity. The main findings include that granted compensation amounts can be predicted to a surprisingly large degree of accuracy based solely on market capitalization. Regarding pay-performance sensitivity of granted compensation, no statistically significant pay-performance sensitivity could be detected for fixed compensation or long-term incentives, but a statistically significant relationship was found between changes in granted short-term incentives and changes in net income. This relationship was found to be weaker during years of crisis, however, the analysis does suffer from a relatively small number of observations. Additionally, the strength of this relationship was found to be negatively correlated with the ownership proportion of the largest shareholder, similarly this relationship was stronger when so called Anglo-American board members were present, however, this finding was not statistically significant and would require further inspection in order to make definite claims on it. Tenure, market capitalization and the presence of foreign board members had no impact on pay-performance sensitivity of granted short-term incentives.