Qualitative characteristics of non-GAAP disclosures and non-GAAP earnings quality

Autor:	Yen-Jung Lee, Han-Chung Chen, Sheng-Yi Lo, Yong Yu
Rok vydání:	2021
Předmět:	Economics and Econometrics 050208 finance Index (economics) Earnings business.industry media_common.quotation_subject 05 social sciences Context (language use) Accounting 050201 accounting 0502 economics and business Earnings quality Quality (business) Business Finance media_common
Zdroj:	Journal of Accounting and Economics. 72:101402
ISSN:	0165-4101
DOI:	10.1016/j.jacceco.2021.101402
Popis:	We examine how the qualitative characteristics of a non-GAAP earnings disclosure reveal the quality of the non-GAAP performance metric itself. We measure the qualitative aspects of the non-GAAP disclosure using an index of 12 hand-coded characteristics and presentation choices that provide context to non-GAAP disclosures. We find that more transparent qualitative information in non-GAAP disclosures is associated with more transitory non-GAAP exclusions and a lower likelihood that managers will aggressively exclude expenses in calculating non-GAAP earnings to meet or beat analysts’ forecasts. We also find that the association between non-GAAP exclusions and earnings announcement period returns is less negative for firms with more transparent qualitative information accompanying their non-GAAP disclosures. Overall, these results suggest that qualitative characteristics of non-GAAP disclosures convey useful information about the quality of non-GAAP earnings metrics.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::c0359dc77bb9a4bfd846a350af3be880 https://doi.org/10.1016/j.jacceco.2021.101402 Zobrazit plný text záznamu Full Text from ScienceDirect