Managerial discretions and loan loss provisions in Nigerian banks
Empirical IFRS and risk evidence
DOI:
https://doi.org/10.29015/cerem.943Keywords:
Deposit money banks, IFRSs, loan loss provisions, managerial discretions, solvency riskAbstract
Aim: The high level of non-performing exposures and the existing crisis in the Nigerian banking sector is a source of concern. To create a basis for solving the troubles caused by the loan loss crisis, this study investigated the managerial discretionary use of loan loss provisions (LLPs) by Nigerian deposit money banks (DMBs). This is considered in the context of solvency risk and reforms embedded in the adoption of International Financial Reporting Standards (IFRSs).
Design/research methods: Datasets related to the variables of the study were hand-collected from annual reports of a sample of 16 Nigerian deposit money banks over the period of 2007-2017. The analyses were performed using principal components analysis to derive the managerial discretions index (MDI), Prais-Winsten ordinary least square regression to segregate LLP into reported LLPs (TLLP) and discretionary LLPs (DLLP) and appropriate panel data regression models to test the study’s hypotheses subsequent to series of diagnostic tests.
Conclusions/findings:The results revealed that managerial discretions negatively influence TLLP and DLLP represented by absolute value of DLLP (ADLLP). This represents an increase in profitability without manipulatingloan loss provisions. However, the reforms embedded in IFRSs revealed the use of LLPs for managerial discretions despite reduction in provisioning level noticeable during IFRS. The situation of Nigerian banks threatened by solvency risk use of LLPs for managerial discretions while attempting to increase profit was exemplified in the increase in ADLLP rather than TLLP. However, improvement was noticeable for risky Nigerian banks during IFRS. The managerial discretionary use of LLPs especially during IFRS was engendered by use of LLPs for capital management and earnings smoothing rather than earnings signalling as further revealed. This shows that adoption of International Financial Reporting Standards reduces reporting quality of Nigerian banks in their loan loss decisions.
Originality/value of the article: The derivation of MDI from measures of earnings smoothing, capital management and earnings signalling is the study’s contribution to accounting for loan losses literature. The adjustments to LLPs to reduce variability of earnings, meet up with minimum regulatory bank capital adequacy ratio and signal strength to absorb future losses encapsulate earnings smoothing, capital management and earnings signalling respectively.
Implications of the research:The discretionary use of LLPs found in this study beckons an increased level of surveillance, oversights and reforms on the part of the regulators for compliance level devoid of managerial opportunistic behaviour to be identifiablewith Nigerian banks.
JEL: D22, G21, G28, L20, M41.
References
Abdallah A.A.-N., Abdallah W., Salama F.M. (2018), The market reaction to the adoption of IFRS in the European Insurance Industry, “The Geneva Papers on Risk and Insurance – Issues and Practice”, vol. 43 no. 4, pp. 653–703.
Abdullah H., Bujang I. (2016), Loan loss provisions and earnings management in a developing economy. Empirical evidence from Thailand, “Advanced Science Letters”, vol. 22 no. 5–6, pp. 1689–1692(4).
Abdullah H., Bujang I., Ahmad I. (2013), Loan loss provisions and earnings management in Malaysian banking industry, “Global Journal of Business and Social Science Review”, vol. 1 no. 1, pp. 93 – 104.
Abdullah H., Bujang I., Sahudin Z. (2017), Empirical investigation on loan loss provisions: Evidence from Hong Kong and Japan, “Advanced Science Letters”, vol. 23 no. 9, pp. 18766–8770(5).
Abu-Serdaneh J.A.R. (2018), Bank loan-loss accounts, income smoothing, capital management, signalling, and procyclicality: evidence from Jordan, “Journal of Financial Reporting and Accounting”, vol. 16 no. 4, pp. 677–693.
Acar M., Ipci M.O. (2015), Loan loss provisions and income-smoothing hypothesis: Experience from Turkish banking sector, “Journal of Accounting, Finance and Economics”, vol. 5 no. 1, pp. 118–135.
Adzis A.A., Anuar H.S., Hishamuddin M. Shahieda N. (2015), Malaysian commercial banks: do income smoothing, capital management, signaling, and pro-cyclicality exist through loan loss provisions?, “International Journal of Economics, Finance and Management”, vol. 4 no. 2, pp. 68–76.
Adzis A.A., Tripe D.W.L., Dunmore P. (2016), IAS 39, income smoothing, and pro-cyclicality: evidence from Hong Kong banks, “Journal of Financial Economic Policy”, vol. 8 no. 1, pp. 80–94.
Ahmed A.S., Takeda C., Thomas S. (1999), Bank loan loss provisions. A reexamination of capital management, earnings management and signaling effects, “Journal of Accounting and Economics”, vol. 28 no. 1, pp. 1–25.
Alali F., Jaggi B. (2011), Earnings versus capital ratios management: role of bank types SFAS 114, “Review of Quantitative Finance and Accounting”, vol. 36 no. 1, pp. 105–132.
Alessi M., Di Colli S., Lopez J.S. (2014), Loan loss provisioning and relationship banking in Italy: practices and empirical evidence, “Journal of Entrepreneurial and Organizational Diversity”, vol. 3 no. 1, pp. 111–129.
Arbak E. (2017), Identifying provisioning policies of Belgian banks, National Bank of Belgium Working Paper, Research No. 326, https://www.nbb.be/doc/ts/publications/wp/wp326en.pdf [30.05.2019].
Ashbaugh H., Pincus M. (2001), Domestic accounting standards, international accounting standards, and the predictability of earnings, “Journal of Accounting Research”, vol. 39 no. 3, pp. 417–434.
Ashour M.O. (2011), Banks loan loss provision role in earnings and capital management – evidence from Palestine, Doctoral Dissertation, Dissertation for the degree of Master in Accounting Finance, Islamic University Gaza, http://library.iugaza.edu.ps/thesis/98935.pdf [31.09.2019].
Ashraf A., Hassan M.K., Putnam K., Turunen-Red A. (2019), Prudential regulatory regimes, accounting standards, and earnings management in the banking industry, “Bulletin of Monetary Economics and Banking”, vol. 21 no. 3, pp. 367–394.
Ashraf A., Hassan M.K., Abul Basher S. (2015), Loan loss provisioning in Organization of Islamic Cooperation countries: evidence from conventional vs. Islamic banks, “Munich Personal RePEc Archive (MPRA) Working Paper” No. 61687, https://mpra.ub.uni-muenchen.de/61687/1/MPRA_paper_61687.pdf [31.09.2019].
Atoyebi T.A., Simon A.J. (2018), The impact of International Financial Reporting Standards (IFRSs) adoption on financial reporting practice in the Nigerian banking sector, “Journal of Accounting, Finance and Auditing Studies”, vol. 4 no. 3, pp. 170–197.
Attia M.B.R., Sassi H., Lassoued N. (2013), Signaling over income smoothing and IFRS adoption by banks: A panel data analysis on MENA countries, “Economics Bulletin”, vol. 33 no. 3, 2340–2356.
Beattie V., Brown S., Ewers D., John B., Manson S., Thomas D., Turner M. (1994), Extraordinary item and income smoothing: a positive accounting approach, “Journal of Business Finance & Accounting”, vol. 21 no. 6, pp. 791–811.
Beatty A., Liao S. (2014), Financial accounting in the banking industry: a review of the empirical literature, “Journal of Accounting and Economics”, vol. 58 no. 2/3, pp. 339–383.
Beck N., Katz J.N. (1995), What to do (and not to do) with time-series cross-section data, “American Political Science Review”, vol. 89 no. 3, pp. 634–647.
Ben Othman H., Mersni H. (2014), The use of discretionary loan loss provisions by Islamic banks and conventional banks in the Middle East region: a comparative study, “Studies in Economics and Finance”, vol. 31 no. 1, 106–128.
Bhat V.N. (1996), Banks and income smoothing: an empirical analysis, “Applied Financial Economics”, vol. 6 no. 6, pp. 505–510.
Blackwell J.L. (2005), Estimation and testing of fixed-effect panel-data systems, “The STATA Journal”, vol. 5 no. 2, pp. 202–207.
Brooks C. (2008), Introductory econometrics for finance, 2nd ed., Cambridge University Press, Cambridge.
Bryce C., Dadoukis A., Hall M., Nguyen L., Simper R. (2015), An analysis of loan loss provisioning behaviour in Vietnamese banking, “Finance Research Letters”, vol. 14, pp. 69–75.
Bushman R.M., Williams C.D. (2012), Accounting discretion, loan loss provisioning, and discipline of banks’ risk-taking, “Journal of Accounting and Economics”, vol. 54, pp. 1–18.
Bustaman Y., Ekaputra I.A., Husodo Z.A., Prijadi R. (2017), Impact of interest margin, market power and diversification strategy on banking stability: evidence from ASEAN-4, “Asian Journal of Business and Accounting”, vol. 10 no. 1, pp. 1–44.
Caporale G.M., Alessi M., Di Colli S., Lopez J.S. (2018), Loan loss provisions and macroeconomic shocks. Some empirical evidence for Italian banks during the crisis, “Finance Research Letters”, vol. 25, pp. 239–243.
Carbo-Valverd S., Rodriguez-Fernandez F. (2018), Do banks game on dynamic provisioning?, “Journal of Financial Management, Markets and Institutions”, vol. 6 no. 1, pp. 1–22.
Central Bank of Nigeria (2010), Prudential guidelines for deposit money banks in Nigeria, http://www.cenbank.org/out/2010/publications/bsd/prudential%20guidelines%2030%20june%202010%20final%20%20_3_.pdf [30.07.2018].
Central Bank of Nigeria (2018), Financial stability report: December 2018, https://www.cbn.gov.ng/Out/2019/FPRD/FSR%20December%202018%20(for%20Publication).pdf [30.03.2020].
Central Bank of Nigeria (2019), Exposure draft on the review of the Prudential Guidelines for commercial, merchant and non-interest banks, https://www.cbn.gov.ng/out/2019/fprd/exposure_dmbs%20%20august%202019.pdf. [22.06.2021].
Chang R.D., Shen W.H., Fang C.J. (2008), Discretionary loan loss provisions and earnings management for the banking industry, “International Business and Economics Research Journal”, vol. 7 no. 3, pp. 9–20.
Chen L., Emanuel D., Li L.Z., Yang M. (2021), Regulatory changes and loan loss provisions management by Chinese banks, “Journal of Accounting in Emerging Economies”, vol. 11 no. 4, pp. 651–675.
Curcio D., Hasan I. (2015), Earnings and capital management and signaling: the use of loan-loss provisions by European banks, “The European Journal of Finance”, vol. 21 no. 1, pp. 26–50.
Curcio D., De Simone A., Gallo A. (2017), Financial crisis and international supervision. New evidence on the discretionary use of loan loss provisions at Euro Area commercial banks, “The British Accounting Review”, vol. 49 no. 2, pp. 181–193.
Curcio D., Dyer D., Gallo A., Gianfrancesco I. (2014), Determinants of banks’ provisioning policies during the crisis, “Managerial Finance”, vol. 40 no. 10, pp. 987–1006.
Demirgüç-Kunt A., Huizinga H. (2010), Bank activity and funding strategies: the impact on risk and returns, “Journal of Financial Economics”, vol. 98, pp. 626–650.
Duru K., Tsitinidis A. (2013), Managerial incentives and earnings management: An empirical examination of the income smoothing in the Nordic banking, master’s thesis, Uppsala University, https://www.diva-portal.org/smash/get/diva2:630941/FULLTEXT01.pdf [25.03.2020].
Dushku E. (2016), Some empirical evidence of loan loss provisions for Albanian banks, “Journal of Central Banking Theory and Practice”, vol. 5 no. 2, pp. 157–173.
El Sood H.A. (2012), Loan loss provisioning and income smoothing in US banks pre and post the financial crisis, “International Review of Financial Analysis”, vol. 25, pp. 64–72.
Elnahass M., Izzeldin M., Steele G. (2018), Capital and earnings management: evidence from alternative banking business models, “The International Journal of Accounting”, vol. 53 no. 1, pp. 20–32.
Eneje B., Obidike C., Chukwujekwu P. (2016) The effect of IFRS adoption on the mechanics of loan loss provisioning for Nigerian Banks, “IOSR Journal of Business and Management”, vol. 18 no. 6, pp. 45–52.
Floro D. (2010), Loan loss provisioning and the business cycle: does capital matter? Evidence from Philippine banks, “Bank for International Settlements Research Paper”, http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.225.6550&rep=rep1&type=pdf [25.03.2020].
Financial Reporting Council of Nigeria (2015), Regulatory decision in the matter of financial statements of Stanbic IBTC Holdings PLC for years ended 31st December 2013 and 2014, https://drive.google.com/file/d/0BxB1bqcIt35aHh2OXBFNFBneWM/view [17.07.2018]
Galdi F., De Moura A., França R. (2021), Loan loss provision models in Brazilian banks, “Meditari Accountancy Research”, vol. 29 no. 6, pp. 1473–1491.
Gebhardt G., Novotny-Farkas Z. (2011), Mandatory IFRS adoption and accounting quality of European banks, “Journal of Business Finance & Accounting”, vol. 38 no. 3–4, pp. 289–333.
Ghosh S. (2007), Loan loss provisions, earnings, capital management and signalling: evidence from Indian banks, “Global Economic Review”, vol. 36 no. 2, pp. 121–136.
Halaoua S., Hamdi B., Mejri T. (2017), Earnings management to exceed thresholds in continental and Anglo-Saxon accounting models: the British and French cases, “Research in International Business and Finance”, vol. 39, pp. 513–529.
Hasan I., Wall L.D. (2014), Determinants of the loan loss allowance: some cross-country comparison, “The Financial Review”, vol. 39 no. 1, 129–152.
Kanagaretnam K., Lobo G.J., Mathieu R. (2004), Earnings management to reduce earnings variability: evidence from bank loan loss provisions, “Review of Accounting and Finance”, vol. 3 no. 1, pp. 128–148.
Kanagaretnam K., Lobo G.J., Mathieu R. (2003), Managerial incentives for income smoothing through bank loan loss provisions, “Review of Quantitative Finance and Accounting”, vol. 20 no. 1, pp. 63–80.
Karimiyana A., Alifiah M.N., Nasserinia A. (2014), Signaling view of loan loss provision in Islamic banks of Malaysia, “International Journal of Management Sciences and Business Research”, vol. 3 no. 9, pp. 42–48.
Kwak W., Lee Y.H., Eldridge S. (2009), Earnings management by Japanese bank managers: using discretionary loan loss provisions, “Review of Pacific Basin Financial Markets and Policies”, vol. 12 no. 1, pp. 1–26.
Le T.D., Tran S.H., Nguyen L.T. (2021), Loan loss provisions, earnings management, capital management, and signalling: the case of Vietnamese banks, “Afro-Asian Journal of Finance and Accounting”, vol. 11 no. 5, pp. 755–771.
Leventis S., Dimitropoulos P.E., Anandarajan A. (2011), Loan loss provisions, earnings management and capital management under IFRS: the case of EU commercial banks, “Journal of Financial Services Research”, vol. 40 no. 1, pp. 103–122.
Leventis S., Dimitropoulos P.E., Anandarajan A. (2012), Signalling by banks using loan loss provisions: the case of the European Union, “Journal of Economic Studies”, vol. 39 no. 5, pp. 604–618.
Ma M.L.Z., Song V. (2016), Discretionary loan loss provisions and systemic risk in the banking industry, “Accounting Perspectives”, vol. 15 no. 2, pp. 89–130.
Mensah E. (2020), The effect of IFRS adoption on financial reporting quality: evidence from listed manufacturing firms in Ghana, “Economic Research-EkonomskaIstraživanja”, 1–16. https://www.tandfonline.com/doi/pdf/10.1080/1331677X.2020.1860109?needAccess=true [24.08.2021]
Misman F.N., Ahmad W. (2011), Loan loss provisions: evidence from Malaysian Islamic and conventional banks, “International Review of Business Research Papers”, vol. 7 no. 4, pp. 94–103.
Muriu P., Josea K. (2020), What explains provisioning behaviour in the banking industry? Evidence from an emerging economy, Working Paper submitted to African Economic Research Consortium, May 2020, https://aercafrica.org/wp-content/uploads/2020/06/C2-Peter-Muriu-and-Josea-Kiplangat-FR-.pdf [31.01.2021]
Nikulin E., Downing J. (2021), Loan-loss provisions, earnings management, and capital management by Russian banks. The impact of changes in banking regulation and oversight, “Eurasian Business Review”, vol. 11, pp. 659–677.
Norden L., Stoian A. (2013), Bank earnings management through loan loss provisions: a double-edged sword?, DNB Working Paper No. 404, https://www.dnb.nl/en/binaries/working%20Paper%20404_tcm47-301517.pdf [17.07.2018].
Olson D., Zoubi T.A. (2014), The determinants of loan loss and allowances for MENA banks. Simultaneous equation and three-stage approaches, “Journal of Islamic Accounting and Business Research”, vol. 5 no. 1, pp. 98–120.
Otusanya J.O., Lauwo S. (2010), The role of auditors in the Nigerian banking crisis, “Accounting Business and the Public Interest”, vol. 9, pp. 159–204.
Otusanya O.J., Uadiale O.M. (2014), Creative accounting and financial scandals in Nigeria: structures and actors analysis, “International Journal of Economics and Accounting”, vol. 5 no. 3, pp. 191–215.
Ozili P.K. (2015), Loan loss provisioning, income smoothing, signaling, capital management and procyclicality: does IFRS matter? Empirical evidence from Nigeria, “Mediterranean Journal of Social Sciences”, vol. 6 no. 2, pp. 224–232.
Ozili P.K., Outa E.R. (2018), Bank income smoothing in South Africa. Role of ownership, IFRS and economic fluctuation, “International Journal of Emerging Markets”, vol. 13 no. 5, pp. 1372–1394.
Ozili P.K., Outa E.R. (2019), Bank earnings smoothing during mandatory IFRS adoption in Nigeria, “African Journal of Economic and Management Studies”, vol. 10 no. 1, pp. 32–47.
Ozili P.K. (2017), Bank income smoothing and loan loss provisioning practices in Africa, Doctoral Dissertation, University of Essex, http://repository.essex.ac.uk/20804/1/Final Corrected Thesis for library submission.pdf [31.01.2020].
Ozili P.K. (2021), Big 4 auditors, bank earnings management and financial crisis in Africa, “Journal of Financial Reporting and Accounting”, vol. 20 no. 2, pp. 215–232 [21.01.2022].
Ozili P.K., Outa E. (2017), Bank loan loss provisions research: a review, “Borsa Istanbul Review”, vol. 17 no. 3, pp. 144–163.
Pérez D., Salas-Fumás V., Saurina Salas J. (2011), Do dynamic provisions reduce income smoothing using loan loss provisions?, Banco de España Documentos de Trabajo Nº 1118, https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/11/Fich/dt1118e.pdf [31.01.2020].
Pérez D., Salas-Fumás V., Saurina J. (2008), Earnings and capital management in alternative loan loss provision regulatory regimes, “European Accounting Review”, vol. 17 no. 3, pp. 423–445.
Petrovska M., Mihajlovska E.M. (2013), Measures of financial stability in Macedonia, “Journal of Central Banking Theory and Practice”, vol. 2 no. 3, pp. 85–110.
Pinho P.S., Martins N.C. (2009), Determinants of Portuguese bank’s provisioning policies. Discretionary behaviour of generic and specific allowances, “Journal of Money, Investment and Banking”, vol. 10, pp. 43–56.
Pramono S.E., Rossieta H., Soedarmono W. (2019), Income smoothing behavior and the procyclical effect of loan loss provisions in Islamic banks, “Journal of Islamic Accounting and Business Research”, vol. 10 no. 1, pp. 21–34.
Proshare (2017), Skye bank Plc: one year after CBN takeover, vol. 1 no 152, August, https://www.proshareng.com/admin/upload/reports/SkyeBankPlcOneYearAfterCBNTakeover.pdf [17.07.2018].
Rosvold I. (2017), The effect of Basel III on earnings management using loan loss provisions, Master Dissertation, Nova School of Business and Economics, Holanda, Carcavelos, Portugal, https://run.unl.pt/bitstream/10362/27897/1/Rosvold_2017.pdf [17.07.2018].
Ryan S.G. (2011), Financial reporting for financial instruments, “Foundations and Trends in Accounting”, vol. 6 no. 3–4, pp. 187–188.
Salami A.A. (2018), Determining a better predictor of bank’s solvency in Nigeria. Risk-based capital or risk-independent capital?, “Acta Universitatis Danubius Oeconomical”, vol. 14 no. 6, pp. 522–546.
Salami A.A. (2021), Bank corporate decisions and loan loss provisioning practices among deposit money banks in Nigeria, Doctoral Dissertation, Kwara State University, Nigeria.
Sanusi L.S. (2010a), The Nigerian banking industry: what went wrong and the way forward, text of convocation lecture delivered at Bayero University, Kano, to mark 2010 convocation ceremony, http://www.cenbank.org/out/speeches/2010/the%20nigerian%20banking%20industry%20what%20went%20wrong%20and%20the%20way%20forward_fnal_260210.pdf [31.03.2021].
Sanusi L.S. (2010b), The Nigerian banking industry in the aftermath of the recent global financial crisis, a text of the lecture delivered at the Chartered Institute of Bankers of Nigeria (CIBN) 44th Annual Bankers’ Dinner, www.cibng.org/admin/publications/CBN%20GOVNOR.pdf [30.03.2019].
Sanusi L.S. (2011), Global financial meltdown and the reforms in the Nigerian banking sector, “CBN Journal of Applied Statistics”, vol. 2 no. 1, pp. 93–108.
Sanusi L.S. (2012), Banking reform and its impact on the Nigerian economy, “CBN Journal of Applied Statistics”, vol. 2 no. 2, pp. 115–122.
Schechtman R., Takeda T. (2018), Capital (and earnings) incentives for loan loss provisions in Brazil. Evidence from a crisis-buffering regulatory intervention, Banco Central do Brasil Working Paper 477, https://www.bcb.gov.br/pec/wps/ingl/wps477.pdf [30.03.2019].
Shala A., Toçi, V. (2021) Bank provisioning behavior, procyclicality and capital management in South-Eastern Europe, “Ekonomicky Casopis”, vol. 69 no. 1, pp. 3–17.
Shawtari F.A., Saiti B., Abdul Razak S.H., Ariff M. (2015), The impact of efficiency on discretionary loans/finance loss provision: a comparative study of Islamic and conventional banks, “Borsa Istanbul Review”, vol. 15 no. 4, pp. 272–282.
Skała D. (2014), Credit policy in small Polish banks – is there room for income smoothing?, “Collegium of Economic Analysis Annals”, vol. 34, pp. 183–196.
Soedarmono W., Pramono S.E., Tarazi A. (2017), The procyclicality of loan loss provisions in Islamic banks, “Research in International Business and Finance”, vol. 39, pp. 911–919.
Solano J., Camino-Mogro S., Armijos-Bravo G. (2020), Intra-banking competition in Ecuador: new evidence using panel data approach, “Journal of Economics, Finance and Administrative Science”, vol. 25 no. 50, pp. 295–319.
Tran D.V., Hassan M.K., Houston R. (2020), Discretionary loan loss provision behavior in the US banking industry, “Review of Quantitative Finance and Accounting”, vol. 55, pp. 605–645.
Uthman A.B., Salami A.A. (2021), IFRS adoption and audit quality in Nigeria. The conditional effect of auditor industry specialization, “Global Journal of Accounting”, vol. 7 no. 2, pp. 80–98.
Van Oosterbosch R.J.J. (2009), Earnings management in the banking industry. The consequences of IFRS implementation on discretionary use of loan loss provisions, Master Thesis, Erasmus School of Economics, Rotterdam, Netherlands, https://thesis.eur.nl/pub/5611/M596-Oosterboschvan_288138.doc [30.03.2019].
Watts R.L., Zimmerman J.L. (1986), Positive accounting theory, Prentice Hall, Englewood Cliffs, NJ.
Watts R.L., Zimmerman, J.L. (1990), Positive accounting theory: a ten year perspective, “Accounting Review”, vol. 65 no. 1, pp. 131–156.
Yasuda Y., Okuda S., Konishi M. (2004), The relationship between bank risk and earnings management: evidence from Japan, “Review of Quantitative Finance and Accounting”, vol. 22, pp. 233–248.
Zgarni A., Fedhila H. (2019), Discretionary loan loss provisions, earnings management and capital management in banks, “Asian Social Science”, vol. 15 no. 7, pp. 424–432.
Downloads
Published
Issue
Section
License
The aim of CEREM is to make scientific work available in accordance with the principle of open access. The rules mentioned below are important, as they enable CEREM and its publisher, the WSB Merito University in Wroclaw, to distribute the scientific work to a wide public while complying with specific legal requirements, at the same time protecting the rights of the authors.
The author transfers to the WSB Merito University in Wroclaw, free of charge and without territorial limitations, with all proprietary copyrights to the said piece of work in the understanding of the act of 4th February 1994 on copyrights and derivative rights (Journal of Laws of 1994, no. 24, item 83, as amended) on an exclusivity basis, i.e. the rights to:
1. Make the piece of work in question available via the Digital Library established by the WSB Merito University in Wroclaw.
2. Produce, record and reproduce in multiple copies the piece of work using any techniques whatsoever, including printing, reprography, magnetic recording and digital processing, and particularly its reproduction by recording on CDs and similar data carriers,
3. Use fragments of the piece of work for promotional purposes in publications, promotional materials, the Internet and Intranet type networks managed by the WSB Merito University in Wroclaw.
4. Store the piece of work into computer databases managed by the WSB Merito University in Wroclaw.
5. Copy and reproduce the piece of work using photo-mechanic technologies other than those commonly known at the time of the signature hereof (photocopies, Xerox copies etc.),
6. Process the piece of work, transferring it into an electronic form, and distribute it on the Internet without limitations.
