The pricing of conservative accounting and the measurement of conservatism at the firm-year level

• Main Authors: SEGAL, Dan, Callen, Jeffrey L., Hope, Ole-Kristian
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2010
• Subjects: Conservatism special items; Linearity; Return decomposition; Conservatism ratio; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/801; https://ink.library.smu.edu.sg/context/soa_research/article/1800/viewcontent/The_Pricing_of_Conservative_Accounting_and_the_Mea.pdf
• Institution: Singapore Management University

This paper analyzes the relation between equity prices and conditional conservatism and introduces a new measure of conservatism at the firm-year level. We show that the asymmetric properties of conservative accounting, the existence of non-accounting sources of information, and the properties of GA...