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Earnings sustainabi...
Earnings sustainability, economic conditions and the value relevance of accounting information
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- Beisland, Leif Atle (author)
- University of Agder, Norway
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- Hamberg, Mattias (author)
- The Norwegian School of Economics, Norway
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(creator_code:org_t)
- Elsevier, 2013
- 2013
- English.
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In: Scandinavian Journal of Management. - : Elsevier. - 0956-5221 .- 1873-3387. ; 29:3, s. 314-324
- Related links:
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https://urn.kb.se/re...
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https://doi.org/10.1...
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Abstract
Subject headings
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- This study demonstrates that the value relevance of accounting information is influenced by the ability to capitalize investments in valuable resources. We use data from Sweden to show that firms that operate in industries in which accounting conservatism limits this capitalization display lower value relevance as a result of more unsustainable earnings components. However, when controlling for the different properties of sustainable and unsustainable earnings components, the difference vanishes. Moreover, we show that firms operating in industries in which more investments are immediately expensed display systematic temporal variations in the level of value relevance. We contend that economic conditions in the form of investment levels and growth expectations explain this variation. Thus, value relevance can be substantially affected by the prevailing economic context.
Subject headings
- SAMHÄLLSVETENSKAP -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)
- SOCIAL SCIENCES -- Economics and Business -- Business Administration (hsv//eng)
Keyword
- Value relevance
- Reported earnings
- Sustainable earnings
- Financial statement information
- Intangible assets
- Investment level
- Growth expectations
Publication and Content Type
- ref (subject category)
- art (subject category)
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