Les auteurs se demandent si le fait pour les directions d’entreprises de présenter des éléments exceptionnels dans les états financiers reflète la performance économique ou révèle l’opportunisme. Ils comparent plus précisément les éléments exceptionnels présentés sous la forme d’un poste distinct de l’état des résultats (présentation en résultats) à ceux qui sont intégrés à un autre poste et présentés uniquement dans les notes complémentaires (présentation par voie de notes). L’étude est motivée par l’intérêt des normalisateurs pour l’information relative à la performance et la présentation des états financiers, ainsi que par les études antérieures relatives aux choix du mode de présentation par les directions d’entreprises, dans d’autres contextes. Les résultats empiriques révèlent que les éléments exceptionnels qui sont présentés en résultats sont moins persistants que ceux qui sont présentés par voie de notes. Ces observations demeurent les mêmes, peu importe les différentes spécifications adoptées. Dans l’ensemble, les constatations des auteurs confirment que les directions d’entreprises qui préfèrent la présentation en résultats à la présentation par voie de notes ont pour but d’aider les utilisateurs à repérer les éléments exceptionnels les plus susceptibles d’être différents des autres éléments des résultats, c’est‐à‐dire que leurs motifs sont plus informationnels qu’opportunistes.

This paper investigates whether managers’ presentation of special items within the financial statements reflects economic performance or opportunism. Specifically, we assess special items presented as a separate line item on the income statement (income statement presentation) to those aggregated within another line item with disclosure only in the footnotes (footnote presentation). Our study is motivated by standard‐setting interest in performance reporting and financial statement presentation, as well as prior research investigating managers’ presentation choices in other contexts. Empirical results reveal that special items receiving income statement presentation are less persistent relative to those receiving footnote presentation. These results are consistent across numerous alternative specifications. Overall, the findings are consistent with managers using the income statement versus footnote presentation to assist users in identifying those special items most likely to differ from other components of earnings — that is, for informational, as opposed to opportunistic, motivations.

This paper investigates whether presentation of special items within the financial statements reflects the firm's underlying economic performance or opportunism. We examine the presentation of recognized special items either as a separate line item on the income statement or aggregated within another line item with disclosure only in the footnotes. Our study is motivated by standard-setting interest in performance reporting and financial statement presentation, as well as prior research investigating managers' presentation choices in other contexts. Using different constructs of persistence to capture the economics of reported special items, we find evidence consistent across a range of specifications that special items highlighted on the income statement are more transitory than those revealed only in the footnotes. For most special items, these results are consistent with this presentation decision reflecting underlying firm performance. For a subset observations -namely, those likely to reflect "big bath" reporting incentives -we provide limited evidence suggestive of opportunism in this presentation decision.

This study examines the effect of regulatory approval on a firm's voluntary product‐level disclosures. We focus on the US biotechnology industry, a setting that allows direct observation of whether firms disclose more information as products proceed through well‐defined—though successively more complex and costly—regulatory hurdles. Consistent with predictions motivated by biotech firms' need to repeatedly raise capital, we find that firms disclose more as their products move to later stages in the development process, both when the products receive regulatory approvals as well as when they receive regulatory denials. In addition, these findings are consistent across phases of development as well as product disclosure categories and are accentuated for firms without internal sources of capital (i.e., lacking product revenue). Collectively, these findings reveal that biotechnology firms respond to the considerable incentives to provide enhanced product disclosure and thus facilitate their ongoing need for capital to proceed through subsequent stages of product development.

This study investigates the mispricing of market‐wide investor sentiment by exploring the relation between sentiment and investor expectations of future earnings. Prior research argues that sentiment‐driven mispricing should be most pronounced for hard‐to‐value firms, such as those reporting losses (Baker and Wurgler 2006). Using investor expectations of future earnings, we provide empirical results consistent with this behavioral finance theory. We predict and find that investors perceive losses to be more (less) persistent during periods of low (high) sentiment; that (in contrast) investors perceive profit persistence to be lower (higher) during periods of low (high) sentiment; and that the effects appear stronger for loss firms relative to profit firms. We also document predictable cross‐sectional variation within losses (with the mispricing mitigated for losses associated with activities expected to generate future benefits), R&D, growth, large negative special items, and severe financial distress. Overall, our results document a new and important channel—investor expectations of future earnings—to explain sentiment‐driven mispricing.

This study examines whether mandatory adoption of International Financial Reporting Standards ( IFRS ) leads to capital market benefits through enhanced financial statement comparability. U.K. domestic standards are considered very similar to IFRS , suggesting any capital market benefits observed for U.K.‐domiciled firms are more likely attributable to improvements in comparability (i.e., better precision of across ‐firm information) than to changes in information quality specific to the firm (i.e., core information quality). If IFRS adoption improves financial statement comparability, we predict this should reduce insiders' ability to benefit from private information. Consistent with these expectations, we find that abnormal returns to insider purchases ― used to proxy for private information ― are reduced following IFRS adoption. Similar results obtain across numerous subsamples and proxies used to isolate IFRS effects attributable to comparability. Together, the findings are consistent with mandatory IFRS adoption improving comparability and thus leading to capital market benefits by reducing insiders' ability to exploit private information.

This paper provides new evidence on whether and how boards solve costly ex post settling up to recover CEO cash compensation for unrealized gains that fail to materialize. Our analyses are motivated by the likely expanding role for ex post settling up as the risk of compensating executives for unrealized gains that may never materialize increases in a more intangibles‐based economy, as well as by the conflicting evidence of prior research. We provide evidence consistent with ex post settling up by (i) using alternative truncation methods to derive observations most likely to fall within the theoretically motivated incentive zone; (ii) replicating and reconciling the conflicting results of prior research that supports (Leone et al. 2006) and fails to support (Shaw and Zhang 2010) ex post settling up; (iii) using Incentive Lab data with contract‐specific information, allowing strong identification of observations in the incentive zone; and (iv) documenting predictable cross‐sectional variation, with ex post settling up being more pronounced for firms with stronger corporate governance, less conservative accounting earnings, and a larger proportion of total pay in the form of cash compensation. Overall, we conclude that evidence is strong in support of the ex post settling up hypothesis.