This paper studies the impact of tightening accounting standards on an impatient manager's long-term investment decisions under earnings based performance evaluation. We analyze how the manager's possibility to influence current earnings will affect his investment decision-making. We examine a...

The discussion on value-based performance measures is centered around the concept of residual income. The main property of residual income is its connection to capital budgeting and the net-present-value-rule. This property is, however, not sufficient to guarantee strong goal congruence between...

Value based performance measures are intended to capture increases in shareholder wealth. At the same time they have to measure the realization of the returns initially planned for. To provide incentives for management to act in the interest of owners, bonus payments are often based on these...

Value based performance measures are intended to capture increases in shareholder wealth. At the same time they have to measure the realization of the returns initially planned for. To provide incentives for management to act in the interest of owners, bonus payments are often based on these...

Purpose – The purpose of this paper is to outline the link between value creation, performance measurement and goodwill accounting according to the International Financial Reporting Standards (IFRS) and United States Generally Accepted Accounting Principles (US-GAAP). Since economic goodwill...

Bonus banks are multi-year performance plans for deferring bonus payments and enhancing pay-for-performance by facilitating downward corrections of bonuses. This paper examines the incentive properties of bonus bank schemes based on performance measures as proposed in the literature. To attain...