Impairment Allowance for Non-Current Assets: Quality of Earnings and Market Reaction

By making a thorough empirical analysis on the financial data from 2001 to 2007 of listed companies in China, the authors find that the impairment allowance for non-current assets obviously decreases the quality of accounting earnings. Investment portfolios based on accrual earnings created by impairment allowance for non-current assets can obtain abnormal returns. There is a negative relationship between accrual earnings created by impairment allowance and abnormal returns. It is concluded that the market can't "see through" the influence impairment allowance for non-current assets has on quality of earnings. This supports the regulation of new Chinese Accounting Standard that forbids the reversion of impairment allowance for non-current assets.

Language

  • English

Media Info

  • Media Type: Web
  • Features: Figures; References; Tables;
  • Pagination: pp 3459-3464
  • Monograph Title: International Conference on Transportation Engineering 2009

Subject/Index Terms

Filing Info

  • Accession Number: 01534725
  • Record Type: Publication
  • ISBN: 9780784410394
  • Files: TRIS
  • Created Date: Nov 12 2013 1:44PM