The Accounting Review Vol. 60 No. 1 1985
Market Reactions to a Non-Discretionary Accounting Change: The Case of Long-Term Investments.
Abstract
It is uncommon for non-discretionary accounting changes to increase reported income. An earlier study by Harrison [1977] concluded that the stock market reacted favorably to such changes. This study reexamines the market's reaction to a change from the cost to the equity method of accounting for long-term investments. Evidence is found to support the view that earnings adjustments precipitated by the change contained new information. However, no market reaction was detected in weeks containing public announcements leading up to and including the Accounting Principles Board's adoption of the change.
- DOI
- 10.2308/tar-4507848
- Volume
- 60
- Issue
- 1
- Pages
- 33-52
- Language
- en
- Sources
- openalex crossref