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PurposeThe purpose of this paper is to examine the impact of US dollar exchange rate risk on the value of Canadian non‐financial firms.Design/methodology/approachThe sample, from the Compustat database, includes all non‐financial Canadian firms with sales over $100 million. The study segregates firms into hedging and non‐hedging groups and applies statistical techniques to test if hedging enhances value.FindingsThe results demonstrate that Canadian firms that have higher levels of US$ sales tend to use derivatives more frequently through higher levels of US$ exposure. Firms that have both US sales and assets appear less likely to use hedging. Firms with an American subsidiary and use financial instruments to hedge have higher values. When operational hedging is used with financial hedging, it is a value enhancing activity increasing their market‐to‐book by 14 per cent and market value‐to‐sales by 40 per cent. Incremental impact of these two hedging strategies is to enhance value by 7 per cent.Research limitations/implicationsThe sample from Compustat captures large capitalization Canadian firms but ignores about 75 per cent of Canadian firms. There is a bias towards larger firms. Some hedging items are not disclosed on financial statements. A survey would enhance and complement these results.Practical implicationsThe paper finds that it is important for Canadian firms that have exports denominated in US dollars to hedge their exposure. The full value of hedging is reaped by using both operational and financial hedges.Originality/valueThis study is the first that examines US dollar risk management by Canadian firms.

PurposeThe purpose of this paper is to survey the accounting concepts of valuation and the direction of accounting research in terms of development of valuation models. It also simulates some of the models. Moreover, the Dividend Discount Model, a financial model, is the foundation of a number of accounting based models and is discussed.Design/methodology/approachThe objectives are achieved by surveying the literature for accounting models and empirical evidence for the model. The methodology also incorporates simulating the models under different conditions to find out the valuation predicted.FindingsIt was found out that the accounting models predict that accrual principles play a role in increasing the discrepancy between the book value and the market value of equity. Some of the recent valuation models, like the Feltham–Ohlson linear information model, incorporate accrual principles like conservatism. Though the empirical evidences are mixed for these models, it provides a theoretical framework to incorporate accrual principles in the accounting valuation models.Practical implicationsThis paper provides practitioners with a snapshot of different models and their limitations.Originality/valueThis paper provides a comprehensive picture of the state of accounting valuation models and provides input for further development of these models.

This research note explores spirituality in management and how this spirituality has been influenced by and reflected in the Islamic faith. The source of the Islamic tradition is found in the Quran and the hadith from the Prophet Muhammad (PBUH). This tradition does not distinguish between the secular person involved in business, government or other enterprises and the spiritual person involved in the practice of faith. Rather Islam is an all-encompassing socio-economic system wherein morals and ethics are inextricably linked to achieve a balance between materialistic and spiritual aspects of this transitory life. This note acknowledges that there can often be disconnect between faith and practice, and provides comments on future research that is needed.

This abstract was created post-production by the JFI Editorial Board. This study examines the hypothesis that there exists a family of unit-variant leptokurtic probability density functions with the attractive properties of normal statistics. It constructs numerically a family of symmetric Normal pdfs defined for fractal spaces with index q. These distributions have the attractive property of having unit variance for 1 <q<2 and approximately unit variance for 0.5<q<1 (the limit of the range that was studied). This paper studies the conjecture that there exists a family of Normal distributions with unit variance that can be defined on metric spaces of dimension m=q/2 for 0<q<2. Some analytical techniques that arise from this conjecture are explored, indicating how one could apply a broader theory of fractal statistics in practice. The power of these techniques follows from the property that the scale of the numerically generated probability distributions is independent of the fractal index q. This allows the non-linearity of fractal statistics to be absorbed into a universal non-linear function of a shape measure with the kurtosis chosen to illustrate the method: for what this study calls Fractal Normal, or Formal, pdfs. It is found that the application of Fractal Normal statistics retains the attractiveness of Normal statistics by allowing optimal solutions to be determined in a straightforward fashion.