Disclosure versus recognition: Evidence from lobbying behavior in response to SFAS No. 158

Fried, Abraham N.

doi:10.1016/j.racreg.2011.12.006

Cited by 12 publications

(4 citation statements)

References 8 publications

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“…The same criteria are not applied for disclosed items. In this respect, and by analogy to the FASB (Financial Accounting Standards Board), investors characterize recognized items as more reliable than disclosed items (Fried, 2012). Nonetheless, Choudhary (2011) and Holthausen, & Watts (2001) argue that recognition suggests less reliability, since managers are more encouraged to manipulate recognized items than disclosed items.…”

Section: Development Of Hypothesesmentioning

confidence: 99%

Value relevance of biological assets under IFRS

Gonçalves

Lopes

Craig

2017

Journal of International Accounting, Auditing and Taxation

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The aim of this paper is to examine the value relevance of fair value accounting of biological assets under IAS 41 -Agriculture -using 389 firm-year observations of listed firms in 27 countries worldwide that had adopted IFRS, for the period between 2011 and 2013. In order to operationalize it as the ability of book value to explain market equity value, this study adjusts the original Ohlson model. The results confirm that recognized biological assets are value relevant at fair value and they are more value relevant in firms that exhibit higher disclosure levels. The same results were obtained when this analysis was conducted for bearer biological assets, but when it was applied to consumable biological assets, the results suggest that investors do not value recognized biological assets in firms that exhibit higher disclosure levels. Bearing in mind the current adjustments to IAS 41, according to which firms will be permitted to choose either the cost or the revaluation models for mature bearer plants under IAS 16 -Property, plant and equipment -for annual periods beginning on/or after 1 January 2016, this paper seeks to help standard setters to better understand the market valuation implications of this standard.

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Section: Development Of Hypothesesmentioning

confidence: 99%

Value relevance of biological assets under IFRS

Gonçalves

Lopes

Craig

2017

Journal of International Accounting, Auditing and Taxation

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“…Given the different institutional setting and proposed amendments, different firm characteristics to those identified in Francis (1987) and Fried (2012) may have driven submitters to lobby the IASB. Hence, this study contributes to our understanding of lobbying behavior in an international context.…”

Section: Prior Literature and Hypotheses Developmentmentioning

confidence: 99%

“…This proposed change will have an impact on balance sheet volatility. Hence, our paper combines the approach adopted by studies which focus on examining lobbying behavior in the context of proposed changes in accounting for items that will be recognized in the financial statements (e.g., Deakin, 1989;Francis, 1987;Ramanna, 2008) as well as studies that focus on the recognition of previously disclosed items (Fried, 2012).…”

Section: Introductionmentioning

confidence: 99%

Why did preparers lobby to the IASB's pension accounting proposals?

Chircop

Kiosse

2015

Accounting Forum

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We examine the characteristics of firms that lobbied on the 2010 Exposure Draft (ED) on pensions and find that signalling influences the decision to lobby. Further, we examine preparer's position to two important proposals in the ED. We find that preparers are less likely to agree with the abolition of the corridor when they report unrecognized actuarial losses and that firms are more likely to oppose the replacement of the expected rate of return with the discount rate when the spread between these two rates is large. These results suggest that while signalling drives firm decisions to lobby, self-interest influences how firms lobby.

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“… See Blankley and Swanson (1995) andBrown (2004).5 The Fama-French industries are defined on Kenneth French's website http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/ det_12_ind_port.html.6 Recent research provides evidence that the recognition of the funded status of postretirement plans increased the volatility of corporate balance sheets(Chang, 2009;Fried, 2012;Knowles, 2011) Fried and Davis-Friday (2013). found that firms attempted to mitigate the impact of the new standard by increasing their discount rate in subsequent periods.…”

mentioning

confidence: 99%