Discussion of inventory policy, accruals quality and information risk

• 成果类型: Editorial Material
• 署名作者: Olsson, Per
• 署名单位: Duke University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-008-9075-2
• 发表日期: 2008
• 页码: 411-417
• 关键词: earnings; cost; equity; returns; ratios; price

摘要

Krishnan et al. (Review of Accouting Studies, 2008) investigate how the choice of LIFO versus FIFO affects firms' accruals quality and cost of capital. The authors show that LIFO firms have better accruals quality and lower cost of capital than FIFO firms and that the cost of capital effect associated with the inventory valuation method is not subsumed by differences either in fundamental risk or accruals quality between LIFO and FIFO firms. This discussion is focused on key design choices and underlying assumptions.