Recognition versus disclosure in the oil and gas industry
Article Abstract:
The pricing consequences of recognition and disclosure in the oil and gas industry are investigated. A sample of 21 full cost firms recognizing a write-down and a sample of 50 successful effort firms disclosing an as-if write-down in their footnotes are analyzed. The test is considered powerful since concentration is on a single industry where the value of product reserves is important for firms' valuations. Cross-sectional regression data reveal a significant negative market response to firms recognizing a write-down. No significant market response to firms disclosing a write-down was observed at the 10-K filing date. The results therefore show that whether a write-down is recognized or disclosed significantly affects firms' values.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
Repeated accounting write-offs and the information content of earnings
Article Abstract:
The information content of earnings in the presence of significant nonrecurring or unusual charges against earnings is investigated. The increasing frequency of reported write-offs, the tendency of firms to report multiple large write-offs and the impact of multiple write-offs on valuation are documented by categorizing firm-quarters according to the frequency of large write-offs during the period 1975-1994. Results show that earnings response coefficients normally decrease in the presence of write-offs and remain relatively low after a period. Results also reveal that unexpected earnings before write-offs are more important in explaining market-adjusted security returns.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
The effect of financial statement classification of hybrid financial instruments on financial analysts' stock price judgments
Article Abstract:
The impact of the balance sheet classification of financial statements characterized by both debt and equity on the stock price judgments of buy-side financial analysts is investigated. An experiment in which buy-side financial analysts predict the price of a firm's publicly traded common stock immediately after news of a new offering of mandatorily redeemable preferred stock (MRPS) is performed. Results suggest that stock price judgments are affected by differential accounting classification. Analysts provided with MRPS-liability balance sheets estimated common stock prices significantly higher than those predicted by analysts using MRPS-equity balance sheets.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Alternative disclosure: the Auditing Standards Board examines the when, why and how of financial statements designed to meet special needs
- Abstracts: The measurement of harmonisation and the comparability of financial statement items: within-country and between-country effects
- Abstracts: Predicting mergers and acquisitions in the food industry. Export decisions of food processing farms in Kansas, Missouri, and Oklahoma
- Abstracts: Mining the international consumer. Assessing the effects of an advance letter for a personal interview survey
- Abstracts: Recovering probability distributions from option prices. A simple formula for the expected rate of return of an option over a finite holding period