Book
The effect of SFAS 121 on discretion in asset impairments
The University of North Carolina at Chapel Hill
2002
Abstract
I examine whether Statement of Financial Accounting Standards No. 121 Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of (SFAS 121) reduced the amount of discretion available to firms in recognizing and reporting asset impairments. Comparing the timing of impairment recognition post-SFAS 121 with pre-SFAS 121, I find that there is a significant shift away from fourth quarter recognition. I also find that post-SFAS 121 impairment disclosures contain more information (defined as a greater quantity of information) compared to pre-SFAS 121 disclosures. Finally, I find limited evidence of a decrease in turnover for post-SFAS 121 announcements consistent with an increase in credibility. However, I find no evidence of a change in investors' response to impairment announcements in terms of returns based measures. Overall, the changes in timing and disclosure due to SFAS 121 do not translate into a change into investors' response to impairments.
Business Administration, Accounting.
Metrics
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Details
- Title
- The effect of SFAS 121 on discretion in asset impairments
- Creators
- Barbara Murray GreinUniversity of North Carolina at Chapel Hill
- Publisher
- The University of North Carolina at Chapel Hill
- Resource Type
- Book
- Language
- English
- Academic Unit
- Accounting
- Identifiers
- 0493906495; 9780493906492; 991020542428904721