Revaluations of fixed assets and future firm performance: Evidence from the UK

Aboody, David; Barth, Mary E.; Kasznik, Ron

doi:10.1016/s0165-4101(98)00040-8

Cited by 373 publications

(311 citation statements)

References 12 publications

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“…A strand of more recent work has been based on revaluations in regimes such as Australia, Hong Kong, New Zealand or the UK where revaluation of assets is permitted. These studies generally demonstrate value relevance (Standish and Ung, 1982;Brown et al, 1992;Whittred and Chan, 1992;Amir et al, 1993;Easton et al, 1993;Easton and Eddey, 1997;Barth and Clinch, 1998;Aboody et al, 1999;Herrmann et al, 2002; Owusu-Ansah and Yeoh 2 , 2006).…”

Section: Tangible Assetsmentioning

confidence: 97%

An Experiment in Fair Value Accounting: UK Investment Vehicles

Danbolt

Rees

2008

European Accounting Review

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Section: Tangible Assetsmentioning

confidence: 97%

An Experiment in Fair Value Accounting: UK Investment Vehicles

Danbolt

Rees

2008

European Accounting Review

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“…Previous research suggests that upward revaluations are relevant for the capital markets, and that they are associated with future operating performance (Easton, Eddey and Harris (1993), Barth and Clinch (1998), Harris and Muller (1998), Aboody, Barth and Kasznik (1999)). In particular, Barth and Clinch (1998) find that the market considers both director and independent revaluations to be value relevant.…”

Section: Aasb 1010 Accounting Formentioning

confidence: 97%

“…Our measure of reliability is motivated in part by Sloan's (1999) discussion of the approach used in Aboody, Barth and Kasznik (1999). Sloan argues that while the analysis of ex post realizations is potentially useful for evaluating the reliability of accounting estimates, "the ex post realizations that are used should correspond more closely to the attributes being estimated by management."…”

Section: Aasb 1010 Accounting Formentioning

confidence: 99%

“…Asset revaluations have received considerable research interest recently (Easton, Eddey and Harris (1993), Barth and Clinch (1998) and Aboody, Barth and Kasznik (1999)). They represent a major departure from historical cost accounting, allowing the book value of non-current assets to be adjusted from historical cost to some other value (for example, fair or market value).…”

Section: Introductionmentioning

confidence: 99%

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Untitled

Cotter¹,

Richardson²

2002

Review of Accounting Studies

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In this paper we examine whether there are differences in the reliability of asset revaluations made by boards of directors versus independent (external) appraisers. We use a sample of recognized Australian asset revaluations. As a first step we examine the determinants of the choice between director-based revaluations and those undertaken by independent appraisers. We find that independent appraisers are more likely to be used for revaluations of land and buildings and directors are more likely for investments, plant and equipment and identifiable intangibles.We interpret this as evidence of firms harnessing directors' knowledge of asset specificities. We also find that firms with less independent boards are more likely to use independent appraisers.We interpret this as evidence of substitutability between governance mechanisms. As for differences in reliability, we find that revaluations of plant and equipment that are made by independent appraisers are more reliable than those by directors. However, we are unable to detect a difference for other classes of non-current assets. We define reliability in terms of expost adjustments of recognized value increases. Reliability is determined by an examination of the extent to which upward revaluations are subsequently reversed.

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“…Consequently, there is some distrust and prudence on the part of the decisiontakers while applying these new accounting politics. Also, based on the anterior literature, (Nafti et al, 2013;Kothari et al, 2003;Mariam & Jacque, 2007;Bartov, 2004;Aboody et al, 1999) these authors suggested that after the application of the IAS/IFRS norms, the managers are less incited to manipulate the earnings up because the put into place of the fair value notion will have as a consequence the immediate increase of the findings.…”

Section: Sc Is the Bias That Can Touch The Interpretation Of These mentioning

confidence: 99%

The Impact of the IAS/IFRS Adoption on the Predictive Quality of Discretionary Accruals: A Comparison between the French and the British Context

Olfa¹,

Hamadi²

2015

IJEF

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The purpose of this article is to study and compare the impact of the adoption of the international standards IAS/IFRS and the legal regime of a country on the pertinence of the discretionary accruals in terms of its quality of the prediction of future operating cash flows in two contexts: The French and United-Kingdom. The findings of our study prove that the adoption of these norms has clearly improved the predictive quality of discretionary accruals in the British context. In France, such effect has been demonstrated as significant and positive for both periods. The study of the impact of the IFRS norms on the predictive quality of discretionary accruals on the two European countries of our study shows that in the British context, the association between the discretionary accruals and the future operating cash flows is more important for the companies using the international norms than in those applying the British ones. In the French context, no significant association between the discretionary accruals and the IFRS has been verified. Next, our study has spread to see the impact of the legal regime on the predictive power of discretionary accruals before and after the adoption of the IAS/IFRS norms. The findings prove that the fullness of the association between the future operating cash flows and the discretionary accruals is stronger for the enterprises which are under the British context than those under the French one.

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Revaluations of fixed assets and future firm performance: Evidence from the UK

Cited by 373 publications

References 12 publications

An Experiment in Fair Value Accounting: UK Investment Vehicles

An Experiment in Fair Value Accounting: UK Investment Vehicles

Untitled

The Impact of the IAS/IFRS Adoption on the Predictive Quality of Discretionary Accruals: A Comparison between the French and the British Context

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