Why reduce profit? – Accounting choice of impairments in Swedish listed corporations?

• Positive accounting theory and institutional theory are used inconjunction in order to explain accounting choice. The theory is applied onIAS 36 (impairment of assets), and tested on a sample of listed Swedishcorporations. We find that the choice is mainly induced by agency and generalbusiness factors and to a slighter degree by institutional factors. Especially, wefind that institutional influence will be stronger when it is in the interest ofimportant stakeholders; that impairments can be used as a mean of signallingtrust to absent owners and that the institutional element of tradition cannot betested separately from the agency element of opportunism.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

Keyword

accounting choice

impairments

Business administration

Företagsekonomi

Publication and Content Type

ref (subject category)

art (subject category)