This paper proposes a generational accounting approach to valuating research. Based on the flow of scientific results, a value-added (VA) index is developed that can, in principle, be used to assign a monetary value to any research result and, by aggregation, on entire academic disciplines or sub-disciplines. The VA-index distributes the value of all applications that embody research to the wor...

I address the interaction between accounting conservatism and real options in both a staged investment and abandonment model. An accounting policy biased towards classifying a Good (Bad) project as Bad (Good) is conservative (aggressive). The accounting signal is optimally conservative when the ex ante unconditional expected terminal value is less than the second investment (staged investment) ...

Studies examining what factors influence relevance of reported numbers in financial statements is becoming increasingly important in the accounting and finance literature. This is an important area for regulators in particular. An understanding of what factors contribute to or detract from value relevance of accounting numbers is essential in the light of globalization that has resulted in inte...

Purpose – This study examines whether high analyst coverage increases or decreases accounting conservatism. Design/methodology/approach – This study selects sample firms from the Compustat and I/B/E/S databases for years 1989-2006. We use both accrual-based and marketvalue-based measures of accounting conservatism. We also use the extent to which negative cash flow from operations is more timel...

Review the literature of conservatism in financial reporting indicates the importance of conservatism in accounting profession. Researchers have always tried to determine the degree and ways of conservatism in financial reporting and accounting, although this is not done easily, because there is not a direct measure of conservatism. However, conservatism has been one of the key principles in ac...

This paper examines the costs and determinants of international capital raising for a sample of 427 straight public debt issues made by non-U.S. firms in the U.S. (Yankee) and Eurodollar markets. We model the joint determination of market choice and interest costs using a switching regression model with endogenous switching. We find that firms issue bonds in the highly regulated U.S. market whe...

Based on data from the Danish Stock Exchange, this paper analyses the value relevance of goodwill and goodwill amortization. Until Danish accounting legislation was changed as of January 1, 2002 companies were allowed to write-off goodwill or capitalize it subject to amortization, which provided a richer information set, as goodwill must be capitalized under most other accounting regimes. The v...

Introduction We examine the relationship between the Cobb-Douglas production function that is frequently used in information technology (IT) productivity studies and the income accounting identity. In doing so we evaluate the impact of this relationship on the question about aggregation from firm-level data to industry-level data when estimating IT productivity, that is, whether industry-level ...

Information asymmetry among stakeholders is the cause of accounting conservatism, since it leads to the asymmetric loss function which brings in the required mechanism to protect the interest of parties with information disadvantage; Agency theory suggests that stakeholders need conservative accounting reports since conservatism will be reciprocal beneficial for all parties and management incen...

This paper studies how information disclosure a ects investment e ciency and investor welfare in a dynamic setting in which a rm makes sequential investments to adjust its capital stock over time. We show that the e ects of accounting disclosures on investment e ciency and investor welfare crucially depend on whether such disclosures convey information about the rm's future capital stock or abo...