Articulation-based accruals

Casey, Ryan; Gao, Feng; Kirschenheiter, Michael; Li, Siyi; Pandit, Shail

doi:10.1007/s11142-016-9385-8

Cited by 15 publications

(15 citation statements)

References 16 publications

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“…NA_ACC, on the other hand, has a relatively high persistence coefficient of 0.683. This result is consistent with the results of Casey et al (2017), who find that non-articulating current operating accruals are highly persistent. They hypothesize that this result arises because acquisitions signal higher future earnings.…”

Section: Selected Applicationssupporting

confidence: 92%

“…Second, we categorize accruals according to whether they articulate across the balance sheet and the statement of cash flows. Non-articulating accruals have been a source of controversy in previous research (e.g., Hribar and Collins 2002;Casey et al 2017). Accruals relating to business acquisitions represent the most significant type of non-articulating accrual.…”

Section: Introductionmentioning

confidence: 99%

“…Hribar and Collins (2002) highlights the presence of accruals arising from nonarticulating events, taking the position that these non-articulating accruals represent measurement error in balance-sheet-based accrual estimates. 4 In contrast, Casey et al (2017) recognize them as legitimate accruals, albeit arising from a different source and having different properties from articulating accruals. For example, whether a company purchases inventory piecemeal or as part of an acquisition, the capitalization of the inventory on the balance sheet still represents an accrual.…”

Section: Introductionmentioning

confidence: 99%

“…Following Hribar and Collins (2002) and Casey et al (2017), we measure nonarticulating accruals (NA_ACC) as the difference between operating accruals measured from the balance sheet (OPACC) and operating accruals measured from the statement of cash flows. Hribar and Collins restrict their attention to articulating accruals relating to the operating section of the statement of cash flows.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Defining, measuring, and modeling accruals: a guide for researchers

2018

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Research on accounting accruals is pervasive. Yet the measurement and modeling of accruals has developed in an ad hoc manner, resulting in a fragmented and incomplete body of research. Our goal is to rectify this situation by (i) providing a comprehensive definition of accruals, (ii) formulating a corresponding empirical measure of accruals, (iii) offering two decompositions of our measure that encapsulate the major classes of accruals studied elsewhere, (iv) combining and expanding prior models of the fundamental determinants of accruals into one parsimonious model, and (v) identifying the primary determinants of each of the major classes of accruals. We close by providing guidance for researchers in tailoring the selection of accruals to the research question at hand.

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Section: Selected Applicationssupporting

confidence: 92%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Defining, measuring, and modeling accruals: a guide for researchers

2018

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“…Accrual based accounting is considered a better predictor of future cash flows than cash based accounting (Dechow et al, 1998). Therefore, the financial statements should prepare on accruals-based accounting principles (Young, 1994;Hertzberg et al, 2010;Bloomfield et al, 2014;Ciconte et al, 2014;Dechow et al, 2014;Barth et al, 2015;Casey et al, 2017;Leal et al, 2017;Fuad et al, 2019). Accruals narrated in financial statements by various accountants are inconsistent and customarily recorded on the concept of earnings management.…”

Section: Introductionmentioning

confidence: 99%

Accruals in the Prediction of Forthcoming Cash Flows in the Companies Listed at Pakistan Stock Exchange

Hussain¹,

Abidin²,

Ibrahim³

et al. 2020

IJEFI

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This research founds the relative predictabilities of accruals and further disaggregated accruals-trading accruals, non-trading accruals, and financial accruals in the estimation of future cash flows. The research also examines the effect of the global financial crisis on this association between accruals and future cash flow prediction. The research uses annual data from the period of 1999 to 2018 from 453 firms, which includes 9060 observations. The whole sample period covers data from 1999 to 2018, during the financial crisis period from 2008 to 2009 and Pre financial crisis period from 1999 to 2007 and Post global financial crisis period 2010 to 2018. To examine the relationship between accruals, disaggregated accruals, and estimation of future cash flows, hypotheses were developed and seasoned through OLS. The outcomes confirm that financial accruals, non-trading accruals, and total aggregated accruals were significant, but trading accruals was not a significant contributor to the estimation of future cash flows. Moreover, there was no significant effect of the global financial crisis on the relationship among disaggregated accruals and forecast of imminent cash flows during Pre and Post and during the global financial crisis period.

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Are earnings better than cash flows at predicting future cash flows? Evidence from apples-to-apples comparisons

Casey,

Ruch

2023

Rev Account Stud

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Articulation-based accruals

Cited by 15 publications

References 16 publications

Defining, measuring, and modeling accruals: a guide for researchers

Defining, measuring, and modeling accruals: a guide for researchers

Accruals in the Prediction of Forthcoming Cash Flows in the Companies Listed at Pakistan Stock Exchange

Are earnings better than cash flows at predicting future cash flows? Evidence from apples-to-apples comparisons

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