Certain financial statement items are closely related, such as items in hedging relationships. In this paper, we develop theory and conduct two experiments to investigate three different balance sheet presentation formats for related financial statement items. We posit that a linked presentation...

Standard setters struggle with the costs and benefits of separate recognition of intangible assets in business combinations. In this study, we experimentally show that separately identifying intangibles enables investors to more easily envision how an acquiring company can benefit from an...

Hybrid financial instruments contain features of both liabilities and equity. Standard setters continue to struggle with “getting the classification right” for these complex instruments. In this paper, we experimentally test whether the features of hybrid instruments affect the...

Hybrid financial instruments contain features of both liabilities and equity. Standard setters continue to struggle with “getting the classification right” for these complex instruments. In this paper, we experimentally test whether the features of hybrid instruments affect the...

We test whether an impending change in the accounting for goodwill mitigates bias in the initial values that acquirers assign to intangible assets. Results of two experiments with experienced professional participants suggest that the new accounting alters, but does not eliminate, bias in...

The provision of examples as implementation guidance is pervasive in accounting standards. Prior research has established that preparers engage in “example-based reasoning,” a tendency to favor the accounting treatment in an example, even when the example does not exactly match the...