What question did this study set out to answer?

The research aims to investigate how the stock market reacts to the shift from cost to equity accounting for long-term investments.

Market Reactions to a Non-Discretionary Accounting Change: The Case of Long-Term Investments.

View Full Paper

Ask AI

Bookmark

Authors

Examines market reactions to accounting changes in long-term investments, suggesting implications for income reporting.

The research aims to investigate how the stock market reacts to the shift from cost to equity accounting for long-term investments.
Reexamination of previous findings on accounting changes and market reactions.
Analysis of market responses during the announcement periods related to the accounting principles change.
Comparison of reported income fluctuations before and after the accounting change.
The market showed no significant reaction during the public announcement periods.
Earnings adjustments linked to the accounting change were considered to contain new information.

Ricks et al. (1985) studied this question.

View Full Paper

Ask AI

Bookmark