An Examination of SFAS No.35: Adoption Timing Motives, Write-Off Characteristics, and Market Reaction

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Title:	An Examination of SFAS No.35: Adoption Timing Motives, Write-Off Characteristics, and Market Reaction
Authors:	Chao, Chia-ling
Contributors:	淡江大學會計學系
Keywords:	Impairments;Write-offs;Earnings management;Market reaction
Date:	2007-05
Issue Date:	2013-03-12 13:14:29 (UTC+8)
Publisher:	臺北市：政治大學會計系財團法人李先庚會計文教基金會
Abstract:	This paper adds to the growing body of literature on managers' discretionary accounting choices in general by specifically studying several issues related to Statement of Financial Accounting Standards (SFAS) No. 35, ”Accounting Treatment of Asset Impairment.” The empirical investigation starts by examining whether the managers' adoption timing choice is associated with various managerial motives. The results show that early adopters are more likely to be in industries with favorable performance in the pre-adoption period, larger in firm size and in the magnitude of asset write-offs, and acting in a manner consistent with ”big bath” behavior. Additionally, this paper provides evidence that reporting incentives determine the amount of asset write-offs reported by firms upon the adoption of SFAS No. 35, after the actual asset impairment is controlled. Specifically, both early and late adopting firms with extremely low earnings tend to take a ”big bath” by reporting a larger magnitude of asset write-offs. The empirical analyses also reveal that the amount of asset write-offs is significantly greater for firms with a management change relative to the firms with no such change, and that late adopters tend to apply the reporting flexibility in the determination of write-off amounts to report a smoother stream of earnings. Finally, this study investigates stock price responses to write-off announcements by partitioning write-offs into expected and unexpected portions. The results reveal that all of the asset write-offs announced by early adopters and the unanticipated portion of the impairment losses for late adopters both convey information of a reduction in future performance to market participants. The above implications are robust to a number of alternative specifications and variables definitions. 近代有越來越多的學術研究，對於財務會計準則公報所附予企業對會計選擇之專業判斷空間，做了相當程度的探討與分析，本文亦為其中之一，探討財務會計準則第三十五號公報『資產減損之會計處理』的一些相關議題。首先，本研究探討上市櫃公司選擇採用第三十五號公報之時點是否受管理者報導動機之影響，結果顯示提早採用該公報的公司，所屬產業在採用該公報前之股價表現較佳、公司規模及資產減損之金額也較大、亦較傾向有洗大澡的行為。其次，本研究探討上市櫃公司認列資產減損之幅度，除了受到經濟因素之影響，是否亦受到報導動機之影響。實證結果顯示，盈餘表現較差之提早採用和準時採用之公司，似乎皆經由認列較多之資產減損損失以達到洗大澡的目的；而不論是在提早採用組或準時採用組，管理階層有異動之公司，皆較傾向認列較多之資產減損；然而利用資產減損以達到盈餘平穩化之動機，僅在準時採用組獲得支持。最後，本研究欲了解資產減損宣告之市場反應，並將資產減損分為預期與非預期兩部份。實證結果發現，提早採用的企業對預期與非預期資產減損的宣告，以及準時採用的企業對非預期之資產減損的宣告，皆產生負向之股價反應，此結果顯示投資人認為前述之資產減損具有傳遞未來績效之資訊內涵。
Relation:	會計評論=International Journal of Accounting Studies 特刊，頁77-120
Appears in Collections:	[Graduate Institute & Department of Accounting] Journal Article

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