Accounting Adjustments and the Valuation of Financial Statement Note Information in 10-K Filings

• 成果类型: Article
• 署名作者: De Franco, Gus; Wong, M. H. Franco; Zhou, Yibin
• 署名单位: University of Toronto; University of Texas System; University of Texas Dallas
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-10094
• 发表日期: 2011
• 页码: 1577-1604
• 关键词: value-relevance literature; Market reaction; earnings; environment; management; STREET; cost; GAAP

摘要

We examine the valuation of financial statement note information at the time of 10-K filings. We find that stock returns around 10-K filings are positively related to accounting adjustments calculated from financial statement note information. We further document that the likelihood of equity analysts issuing a report and updating their target price estimates at the 10-K dates is increasing in the magnitude of the adjustments. Those analysts who do update their target prices at this time revise their estimates consistent with the sign and magnitude of the adjustments. These findings are consistent with financial statement users utilizing financial statement note information to make accounting adjustments, thereby incorporating this information into stock prices.