Naslov
Asymmetric Timeliness of Earnings across Corporate Life-Cycle Stages

Autori
Šodan, Slavko ; Aljinović Barać, Željana

Izvornik
The journal of American business review, Cambridge (2167-0803) 1 (2013), 2; 143-149

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
accounting conservatism; asymmetric timeliness; corporate life-cycle stages

Sažetak
This paper analyzes differences in earnings asymmetric timeliness across companies’ life-cycle stages. Asymmetric timeliness of earnings implies more timely recognition of economic losses than gains and it is the most commonly used measure of conditional conservatism in accounting. Namely, conservative bias in accounting causes negative stock returns, which reflect downward adjustment in economic income, to have a higher association with earnings than positive stock returns. Accordingly, economic losses are reflected in earnings faster than economic gains. This research assumes that level of earnings asymmetric timeliness, i.e. level of conditional conservatism, will differ across different corporate life-cycle stages. We argue that companies in early life-cycle stages which require a great use of financial leverage, so they will apply less conservative financial reporting than mature companies, in order to improve their perceptive borrowing capacity. Empirical evidence is provided through the sample of large, listed companies from 14 Western European countries in succession from 2002 to 2011. Estimated results indicate that companies in introduction and growth stage of corporate life-cycle have low level of asymmetric timeliness of earnings

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA