This study addresses three research questions relating to total exclusions, special items, and other exclusions. Are each of these pro forma exclusion components forecasting irrelevant? Are each of the exclusion components value irrelevant? Are the valuation multiples on the exclusion components...

We use the Ohlson (1995, 1999) and Feltham-Ohlson (1999) valuation models to compare the extent to which Accounting Principles Board Opinion 25: Accounting for Stock Issued to Employees (APB 25), Statement of Financial Accounting Standards No. 123: Accounting for Stock-Based Compensation (SFAS...

In this study we compare the ability of alternative accounting methods for employee stock options (ESOs) to reflect firm value using the Ohlson [1995, 1999] and Feltham-Ohlson [1999] valuation models for a sample of 85 computer software firms. The three methods we compare are APB 25, ESO expense...

This study addresses whether firms' share prices correctly reflect two accounting measures, dirty surplus and really dirty surplus. Dirty surplus is readily observable from the financial statements, but really dirty surplus, which arises from recognizing equity transactions such as employee...