With its standards FAS 141 and 142 the Financial Accounting Standard Board has revo-lutionized the accounting for business combinations. One of the major changes is theabolishment of goodwill-amortization, which has been replaced by an annual impairmenttest at the level of a reporting unit....

This paper analyzes the consequences of the capitalization of development expenditures under IAS 38 on analysts' earnings forecasts. We use unique hand-collected data in a sample of highly research and development (R&D) intensive German listed firms over the period 2000 to 2007. We find that the...

If target prices reflect the true values of stocks, they should direct prices towards intrinsic values. But analysts’ optimism and use of less sophisticated valuation methods have been found to impede target price informativeness. We find that target price optimism has a positive effect on the...

If target prices are reflective of the true value of a stock, they should correctly reflect the market’s over- and underpricing, that is, be negatively associated with investor sentiment. However, empirical evidence of Clarkson et al. (2020) finds the opposite. Prior research offers two...