Implications of Non-GAAP earnings for real activities and accounting choices

• 成果类型: Article
• 署名作者: Laurion, Henry
• 署名单位: University of Colorado System; University of Colorado Boulder
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2020.101333
• 发表日期: 2020
• 关键词: pro forma; Managers; INVESTMENT; conservatism; determinants; disclosure; STREET

摘要

Managers almost always define non-GAAP earnings to exclude the effects of acquisition and restructuring expenses, the amortization of intangibles, and impairments. I find that managers with a history of reporting non-GAAP earnings act as if they place lower weight on these excluded expenses when making real activities and accounting choices. They pursue more and larger acquisitions, have higher total capital investment, are more likely to restructure, and are more likely to recognize discretionary impairments. In a difference-in-differences setting, I find that non-GAAP reporting firms are less likely to alter their restructuring activities following a significant change in accounting rules for restructuring expense recognition. Finally, in supplementary analyses, I find that non-GAAP-reporting firms tend to repeat these real activities and accounting choices year-after-year, resulting in more persistent special-item expenses. (C) 2020 Elsevier B.V. All rights reserved.