This study investigates the informational content of losses and their effect on the association between earnings and … stock returns. Previous studies demonstrated that losses are less informative than positive earnings since they are not …, the results indicate that the frequency of losses varies with firm size. Also, the estimated Earnings Response …

hypothesis afore mentioned, specifically about the effects of the accruals components over the earnings persistence. …

Recent research examines the implications of components of accruals for future profitability. Because the persistence …-making companies in the association between components of accruals and future profitability. Using the approach adopted by Richardson …, Sloan, Soliman and Tuna (2006) we find evidence suggesting that the components of accruals related to revenue growth and to …

We study the determinants of losses and their increased frequency over time to understand their implications for the … use of financial statements in valuation. We find the properties of losses change between 1971-2000 both in terms of the … cash flow and accruals components. Departing from prior research, we explicitly model the estimated likelihood of loss …

on the type of loss: they value only the aggregate accruals component of persistent losses and only the aggregate cash … (low probability of reversal) and transitory (high probability of reversal) losses, we show the pricing of losses, as well … option to be smaller. We also find the market responds negatively to persistent losses, especially in the latter part of the …

research & development (R&D) expenditures is, by nature, equivalent to cash accounting. Prior studies have found that accrual …&D accounting. By adjusting the earnings we create two samples reflecting R&D capitalization and expensing, respectively. We … power of earnings compared to cash flows (expensing) while internalizing ‘other information’ into the accounting system …

driven by regulatory differences between accounting and tax rules and ABTDs are more likely driven by earnings and tax … NBTDs can provide incremental information about earnings persistence beyond the information in discretionary accruals and … total accruals, suggesting that the investigation of BTDs adds value to financial analysis. …