What question did this study set out to answer?

To evaluate the impact of switching from accelerated to straight-line depreciation on financial statements.

March 18, 2026The Accounting Review

Market Response to Changes in Depreciation Accounting.

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Authors

ECEugene E. ComiskeyGeorgia Institute of Technology

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Implication

This analysis explores how a move to straight-line depreciation affects earnings quality in steel companies, suggesting implications for financial reporting.

Key Points

To evaluate the impact of switching from accelerated to straight-line depreciation on financial statements.
Analyzed annual reports of steel companies that switched depreciation methods in 1968.
Measured the impact on profitability and earnings quality after the accounting switch.
Examined the relationship between accounting choices and earnings valuation.
Switching to straight-line depreciation was perceived to reduce earnings quality.
None of the companies cited profit increase as a reason for the accounting change.
The more conservative accounting practices appeared to decrease the valuation rate of earnings.

Cite This Study

Eugene E. Comiskey (1971) studied this question.

synapsesocial.com/papers/69ba434a4e9516ffd37a456a https://doi.org/10.2308/tar-4487542

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Implication

This analysis explores how a move to straight-line depreciation affects earnings quality in steel companies, suggesting implications for financial reporting.

Market Response to Changes in Depreciation Accounting.

Discussion

Member takes

Implication

Key Points

Cite This Study

Market Response to Changes in Depreciation Accounting.

Discussion

Member takes

Implication

Key Points

Cite This Study

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