Revaluations of fixed assets and future firm performance: Evidence from the UK

• 成果类型: Article
• 署名作者: Aboody, D; Barth, ME; Kasznik, R
• 署名单位: Stanford University; University of California System; University of California Los Angeles
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/S0165-4101(98)00040-8
• 发表日期: 1999
• 关键词: long-lived assets; VALUE-RELEVANCE; Cash flows; earnings; accruals; returns

摘要

We find, as predicted, that upward revaluations of fixed assets by UK firms are significantly positively related to changes in future performance, measured by operating income and cash from operations, indicating revaluations reflect asset value changes. Current year revaluations (revaluation balances) also are significantly positively related to annual returns (prices). Relations between revaluations and future performance and prices are weaker for higher debt-to-equity ratio firms, indicating motivation affects how revaluations reflect asset value changes. The relations also are weaker for cross-listed firms and in a more volatile economic time period. Our inferences are robust to controlling for firms' acquisition activity. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: M4; G15; G18.