Discussion of Accounting standards and debt covenants: Has the Balance Sheet Approach led to a decline in the use of balance sheet covenants?

• 成果类型: Article
• 署名作者: Skinner, Douglas J.
• 署名单位: University of Chicago
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2011.09.004
• 发表日期: 2011
• 关键词: information; GAAP

摘要

Demerjian (this issue) argues that a shift by U.S. standard setters towards the balance sheet approach reduces the usefulness of balance sheet numbers for contracting. Consistent with this argument, he provides evidence of a decline in the use of balance sheet-based covenants in debt contracts, a useful finding. Nevertheless, I argue that the evolution of standard-setting is more complex than this argument implies, and evaluate the economic basis of Demedian's arguments for how debt contracts respond to changes in accounting rules. One conclusion that emerges is that there are still some important open issues regarding the economic determinants of debt contracts. (C) 2011 Elsevier B.V. All rights reserved.