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Author : Chunqi Zhang
Publisher :
ISBN 13 :
Total Pages : 176 pages
Book Rating : 4.:/5 (35 download)
Download or read book Pricing Effects of Recognition Versus Disclosure written by Chunqi Zhang and published by . This book was released on 2005 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Preeti Choudhary
Publisher :
ISBN 13 : 9780549486183
Total Pages : 103 pages
Book Rating : 4.4/5 (861 download)
Download or read book Effects of Recognition Versus Disclosure on the Structure and Financial Reporting of Share Based Payments written by Preeti Choudhary and published by . This book was released on 2000 with total page 103 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Mary E. Barth
Publisher :
ISBN 13 :
Total Pages : 44 pages
Book Rating : 4.:/5 (129 download)
Download or read book Market Effects of Recognition and Disclosure written by Mary E. Barth and published by . This book was released on 2010 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Our recognition and disclosure model reveals that accounting expertise acquisition and three informational forces, the quality of the recognized amount, the quality of disclosed information, and the quality of information revealed by price, have offsetting and countervailing effects on market performance. It also reveals that recognition of an accounting amount potentially alters each of these forces and expertise acquisition, thereby affecting market performance. We find that recognition of a highly unreliable accounting amount, rather than simply disclosing it, can result in greater price informativeness. Likewise, recognition of a highly reliable amount can result in lower price informativeness. Our findings suggest that basing recognition decisions on reliability alone is too simplistic: reliability relative to relevance is key, not reliability per se. We also find that recognition and disclosure affect the coefficients in a regression of price on accounting amounts, even when the relevance and reliability of the accounting amounts are the same.
Author : Kun Yu
Publisher :
ISBN 13 :
Total Pages : 436 pages
Book Rating : 4.:/5 (719 download)
Download or read book Does Recognition Versus Disclosure Matter? written by Kun Yu and published by . This book was released on 2009 with total page 436 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: An important area of research and issue of interest for standard setters is whether information disclosure in the footnotes is a substitute for recognition in the financial statements. SFAS 158, issued in 2006, requires the recognition of pension liabilities that were only disclosed in the footnotes under SFAS 87, for the fiscal year ending after Dec. 15, 2006. I empirically examine whether the recognition of the previously disclosed off-balance-sheet pension liabilities affects investors' valuation and firms' contracting costs. I also incorporate levels of investor sophistication in my analyses. Using a sample of firms with pension liabilities that were disclosed under SFAS 87 and subsequently recognized under SFAS 158 from 1999 to 2007, I find that, without considering investor sophistication, SFAS 158 generally does not increase the value relevance of the previously disclosed off-balance-sheet pension liabilities. However, after taking into account investor sophistication, I show that the disclosed off-balance-sheet pension liabilities are more value relevant for firms with a higher level of investor sophistication in the pre-158 period; more importantly, I find that SFAS 158 significantly increases the value relevance of the previously disclosed off-balance-sheet pension liabilities for firms with a low proportion of sophisticated investors, and the increase in the value relevance is less pronounced for firms with a higher proportion of sophisticated investors. Consistent with the contracting theory, I find that requiring the recognition of previously only-disclosed liabilities affects the debt contracting cost and the cost of capital. However, only sophisticated investors appear to understand the effect of SFAS 158 on the debt contracting cost and the stock price. Overall, the results support that recognition affects investors' valuation and firms' contracting costs. The results also highlight the role of the level of investor sophistication in the value relevance of disclosed vs. recognized financial information.
Author : Shana Clor-Proell
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)
Download or read book The Impact of Recognition Versus Disclosure on Financial Information written by Shana Clor-Proell and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate whether recognition on the face of the financial statements versus disclosure in the footnotes influences the amount that financial managers report for a contingent liability. Using an experiment with corporate controllers and chief financial officers, we find that financial managers in public companies expend more cognitive effort and exhibit less strategic bias under recognition than disclosure. This difference appears to be associated with capital market pressures experienced by public company managers as we find that both the cognitive effort and bias exhibited by private company managers are unaffected by placement. As a result, public company managers make higher liability estimates for recognized versus disclosed liabilities. Their liability estimates are similar to those of private company managers for recognition but lower than private company managers' estimates for disclosure. Our results have implications for auditors and financial statement users in evaluating recognized versus disclosed information for public and private companies.
Author : Preeti Choudhary
Publisher :
ISBN 13 :
Total Pages : 48 pages
Book Rating : 4.:/5 (129 download)
Download or read book The Economic Consequences of Recognition Versus Disclosure written by Preeti Choudhary and published by . This book was released on 2012 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine how recognition versus disclosure of the fair value of stock compensation affects the compensation decision (the amount and structure of options awarded). The median firm in my sample disclosed fair value option costs equal to about 7% of profits in 1996 and 11% of profits in 2004. When fair value option costs are recognized, I find an average (median) reduction in option grants equal to 9% (0.4%) of absolute net income. The evidence indicates that firms substituted options with restricted stock during fair value recognition; however, I find no evidence of changes in option grants during the fair value disclosure pronouncement. These results suggest that managers and governing boards treat recognition differently from disclosure, such that the inclusion of fair values in summary total figures leads to systematic changes in the structure of contracts, while changes in the valuation method do not lead to such changes.
Author : Doron Israeli
Publisher :
ISBN 13 :
Total Pages : 59 pages
Book Rating : 4.:/5 (13 download)
Download or read book Recognition Versus Disclosure written by Doron Israeli and published by . This book was released on 2015 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: The application of International Accounting Standard (IAS) 40, Investment Property, in the European Union created a unique setting to study the implications of a decision to recognize versus disclose financial statements' items because in this setting recognized and disclosed investment-property-related amounts share a common measurement base, i.e., fair value. I utilize this setting to (1) explore factors associated with a firm's choice to recognize versus disclose fair values of investment properties, (2) test whether recognized and disclosed amounts are valued equally by equity investors, and (3) determine whether these amounts exhibit equivalent associations with future financial outcomes. To correct for self-selection concerns and assure I compare analogous amounts, I develop a selection model and construct investment-property-related amounts that differ only in whether their components are recognized or disclosed. I find that (1) contractual and asset pricing incentives help explain the recognition versus disclosure choice, (2) investors place smaller valuation weights on disclosed amounts, and (3) recognized and disclosed amounts exhibit statistically equivalent associations with future changes in net rental income and cash flows from operations. Taken together, the evidence suggests that managers are opportunistic in making the recognition versus disclosure choice and that even when recognized and disclosed amounts share an equivalent measurement base and are equally relevant for future financial outcomes, investors weight disclosed information less heavily in determining a firm's value.
Author : Jeremy Michels
Publisher :
ISBN 13 :
Total Pages : 55 pages
Book Rating : 4.:/5 (13 download)
Download or read book Disclosure Versus Recognition written by Jeremy Michels and published by . This book was released on 2016 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: Standard setters explicitly state that disclosure should not substitute for recognition in financial reports. Consistent with this directive, prior research shows that investors find recognized values more pertinent than disclosed values. However, it remains unclear whether reporting items are recognized because they are more relevant for investing decisions, or whether requiring recognition itself prompts differing behavior on the part of firms and investors. Using the setting of subsequent events, I identify the differential effect of requiring disclosure versus recognition in a setting where the accounting treatment of an item is exogenously determined. For comparable events, I find a stronger initial market response for firms required to recognize relative to firms that must disclose, although the large magnitude of the identified effect calls into question whether this difference can be attributed to accounting treatments alone. In examining various reasons for the stronger market response to recognized values, I fail to find support for the hypothesis that this difference is due to differential reliability of disclosed and recognized values. I do find some evidence that investors underreact to disclosed events, consistent with investors incurring higher processing costs when using disclosed information.
Author : Julie Cotter
Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (129 download)
Download or read book Disclosure Versus Recognition written by Julie Cotter and published by . This book was released on 2003 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Australian GAAP requires firms to either disclose or recognize the current values of real estate in their financial statements. Given recognition criteria related to reliable measurement, the propensity to recognize an upward revaluation is subject to the inherent uncertainty of the assessed increase in value. Accordingly, we predict and find that managers are more likely to recognize (rather than just disclose) revaluations when the revaluation estimate is more reliable. The recognition criteria contained in Australian GAAP implies that market participants will rationally infer that revaluations recognized in the balance sheet are more reliably measured than those disclosed in footnotes. An analysis of share market effects finds that the market discounts disclosure compared to recognition of real estate revaluations. This effect becomes insignificant when controls for the reliability of revaluations are included in the analysis, and we therefore conclude that the value relevance of recognized revaluations is not due to recognition per se, but rather to the fact that the assets being revalued are more reliably measured.
Author : John Donovan
Publisher :
ISBN 13 :
Total Pages : 49 pages
Book Rating : 4.:/5 (13 download)
Download or read book Does Recognition Versus Disclosure Affect Debt Contract Design? Evidence from SFAS 158 written by John Donovan and published by . This book was released on 2019 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study how recognition versus disclosure affects the control function of accounting through the use of debt covenants. While research shows that recognition affects the value-relevance of reported amounts, the effect on contracting is unclear. We examine whether covenants changed around SFAS 158 adoption, which required recognition of previously disclosed pension liabilities. We find that pension underfunding is negatively associated with the use of capital (i.e., balance sheet) covenants prior to recognition. Post-SFAS 158, pension underfunding is associated with a higher likelihood of using capital covenants relative to the pre-period. We find no evidence that SFAS 158 alters the use of income statement covenants. Additional analysis suggests a decrease in cost of debt with no corresponding change in credit risk. Collectively, the evidence suggests that recognition enables more effective allocation of control through the use of covenants because financial statements better represent the financial condition of the borrower.
Author : Gilles Hilary
Publisher : Edward Elgar Publishing
ISBN 13 : 1802204172
Total Pages : 463 pages
Book Rating : 4.8/5 (22 download)
Download or read book Handbook of Financial Decision Making written by Gilles Hilary and published by Edward Elgar Publishing. This book was released on 2023-08-14 with total page 463 pages. Available in PDF, EPUB and Kindle. Book excerpt: This accessible Handbook provides an essential entry point for those with an interest in the increasingly complex subject of financial decision making. It sheds light on new paradigms in society and the ways that new tools from private actors have affected financial decision making. Covering a broad range of key topics in the area, leading researchers summarize the state-of-the-art in their respective areas of expertise, delineating their projections for the future.
Author : Orie E. Barron
Publisher :
ISBN 13 :
Total Pages : 58 pages
Book Rating : 4.:/5 (13 download)
Download or read book Information Asymmetry and the Ex Ante Impact of Public Disclosure Quality on Price Efficiency and the Cost of Capital written by Orie E. Barron and published by . This book was released on 2013 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the ex ante effects of public information quality on market prices and how such effects vary with information asymmetry among traders in a two-period experimental market. We vary public information quality by changing its precision and information asymmetry among traders by varying the distribution of private signals. We find high quality public disclosure leads to increased price efficiency and decreased cost of capital in the pre-announcement period when information asymmetry is high. The impending high quality public information increases the competition among informed traders, which leads prices to impound more private information and alleviates adverse selection problem facing uninformed traders. Our study suggests that building a high quality public information environment, e.g., by adopting a high quality accounting standards or following transparent disclosure policy is likely to provide ex ante benefits for firms with significant adverse selection among traders.
Author : Christopher S. Chapman
Publisher : Oxford University Press
ISBN 13 : 0199546355
Total Pages : 458 pages
Book Rating : 4.1/5 (995 download)
Download or read book Accounting, Organizations, and Institutions written by Christopher S. Chapman and published by Oxford University Press. This book was released on 2009-08-13 with total page 458 pages. Available in PDF, EPUB and Kindle. Book excerpt: Brings together the work of leading international accounting academics and social scientists. Explores a range of intellectual traditions in accounting research, and their implications for the social sciences more widely.
Author : Mary E. Barth
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)
Download or read book Differential Information Environments written by Mary E. Barth and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We test and find strong evidence in support of two hypotheses related to firms' information environments. 1) Firms with stronger information environments have larger market-to-book ratios than firms with weaker information environments consistent with lower cost of capital after controlling for factors identified in prior research as affecting these ratios. 2) Information environments affect the relation between share prices and accounting amounts more for disclosed than recognized amounts. We use net pension assets disclosed under SFAS 87 and book value of equity to test hypothesis 2. We use size number of shareholders number of analysts dispersion of analysts' earnings forecasts exchange listing number of months listed as a publicly-traded firm and trading volume as information environment proxies and find they reflect three principal aspects of information environments: investor recognition and information availability liquidity and disparity of beliefs.
Author : Ik Seon Suh
Publisher :
ISBN 13 :
Total Pages : 194 pages
Book Rating : 4.:/5 (437 download)
Download or read book The Effects of Audit Committee Financial Accounting Expertise and Recognition Versus Disclosure on Chief Audit Executives' Tolerance for Financial Misstatements written by Ik Seon Suh and published by . This book was released on 2009 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt: The present study examines and finds that internal auditors, particularly Chief Audit Executives, recognize financial accounting expertise as a significant base of audit committee (AC) power in the financial reporting process. However, such an AC expertise (i.e., financial accounting expertise) does not "counterbalance" internal auditors' perceived dependency on management or influence their decisions to monitor financial reporting quality. Instead, the cost-benefit analysis affects their decisions: (1) benefits of staying resolute to monitor financial reporting quality (i.e., "psychological empowerment"), and (2) costs of potential adverse reactions of management who exerts power over the internal audit.
Author : Andreas Zweifel
Publisher : GRIN Verlag
ISBN 13 : 3668410623
Total Pages : 100 pages
Book Rating : 4.6/5 (684 download)
Download or read book An Investigation of the Causal Effect of Voluntary Disclosure Quality on Cost of Equity Capital written by Andreas Zweifel and published by GRIN Verlag. This book was released on 2017-03-07 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2012 in the subject Economics - Finance, grade: 5.5, University of Zurich (Department of Banking and Finance), course: Economics and Finance, language: English, abstract: Does voluntary disclosure quality pay off? And if so, what are the driving forces behind the relationship of voluntary disclosure quality and the cost of equity capital? This study addresses these and other questions in the context of analyzing the determinants of the cost of equity capital for Swiss firms. The relation between voluntary disclosure quality and cost of equity capital is widely known to be affected by self-selection. Potential endogeneity bias is controlled for by adopting a two-stage least squares approach in a cross-sectional setting. Voluntary disclosure quality is proxied by the annual reports disclosure scores for a well-diversified sample of Swiss firms as developed by the Department of Banking and Finance of the University of Zurich. Further, an ex-ante cost of capital metric derived from the dividend discount model is used in this study. Empirical evidence shows that the association between voluntary disclosure quality and cost of equity differs with a firm's stock listing history. While the relation is predicted to be negative for firms at the IPO stage, it is likely reversed at some point in a firm's stock listing history. These results suggest that analysts' information processing activities negatively moderate the impact of voluntary disclosure quality on firm value. Importantly, the predicted interaction between voluntary disclosure quality and stock listing history remains significant when adjusting for endogeneity.
Author : O. Ray Whittington
Publisher : John Wiley & Sons
ISBN 13 : 111875994X
Total Pages : 2239 pages
Book Rating : 4.1/5 (187 download)
Download or read book Wiley CPA Examination Review, Outlines and Study Guides written by O. Ray Whittington and published by John Wiley & Sons. This book was released on 2013-07-01 with total page 2239 pages. Available in PDF, EPUB and Kindle. Book excerpt: The #1 CPA exam review self-study leader The CPA exam review self-study program more CPA candidates trust to prepare for the CPA exam and pass it, Wiley CPA Exam Review 40th Edition contains more than 4,200 multiple-choice questions and includes complete information on the Task Based Simulations. Published annually, this comprehensive two-volume paperback set provides all the information candidates need in order to pass the CPA Examination. Features multiple-choice questions, AICPA Task Based Simulations, and written communication questions, all based on the CBT-e format Covers all requirements and divides the exam into 47 self-contained modules for flexible study Offers nearly three times as many examples as other CPA exam study guides Other titles by Whittington: Wiley CPA Exam Review 2013 With timely and up-to-the-minute coverage, Wiley CPA Exam Review 40th Edition covers all requirements for the CPA Exam, giving the candidate maximum flexibility in planning their course of study, and success.
