Reversals of impairment charges under IAS 36: evidence from Malaysia

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dc.contributor.author Shaari, Hasnah
dc.contributor.author Cao, Tongyu
dc.contributor.author Donnelly, Ray
dc.date.accessioned 2018-07-27T12:01:05Z
dc.date.available 2018-07-27T12:01:05Z
dc.date.issued 2017-06-30
dc.identifier.citation Shaari, H., Cao, T. and Donnelly, R. (2017) 'Reversals of impairment charges under IAS 36: evidence from Malaysia', International Journal of Disclosure and Governance, 14(3), pp. 224-240. doi:10.1057/s41310-017-0022-y en
dc.identifier.volume 14 en
dc.identifier.issued 3 en
dc.identifier.startpage 224 en
dc.identifier.endpage 240 en
dc.identifier.issn 1741-3591
dc.identifier.issn 1746-6539
dc.identifier.uri http://hdl.handle.net/10468/6509
dc.identifier.doi 10.1057/s41310-017-0022-y
dc.description.abstract We report that firms reversing impairments under IAS 36 are not more incentivized to engage in earnings management and do not actually engage in more earnings management than a control sample matched on size and industry. We observe that reversals are positively associated with stock market valuation changes but not with future operating performance. Bifurcating our reversal firms into earnings managers and other firms, we report that the impairment reversals of the latter are positively associated with future firm performance and current stock market returns, while those of the former are negatively associated with future operating performance and are unrelated to stock valuation. Thus, while on average impairment reversals are undertaken in an unbiased manner, a minority of firms exploit the latitude provided by this fair value accounting standard to manage earnings upward. This research provides useful information to accounting standard setters pertaining to the adoption of fair value accounting methods. It also assists investment analysts by demonstrating how to detect opportunistic reversals of impairments. en
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.publisher Palgrave Macmillan en
dc.rights © 2017, Macmillan Publishers Ltd. This is a post-peer-review, pre-copyedit version of an article published in International Journal of Disclosure and Governance. The definitive publisher-authenticated version [Shaari, H., Cao, T. and Donnelly, R. (2017) 'Reversals of impairment charges under IAS 36: evidence from Malaysia', International Journal of Disclosure and Governance, 14(3), pp. 224-240. doi:10.1057/s41310-017-0022-y] is available online at: https://dx.doi.org/10.1057/s41310-017-0022-y en
dc.subject Reversal of impairment losses en
dc.subject Firm performance en
dc.subject Financial reporting standard en
dc.subject Abnormal accruals en
dc.subject Earnings management en
dc.subject Malaysia en
dc.title Reversals of impairment charges under IAS 36: evidence from Malaysia en
dc.type Article (peer-reviewed) en
dc.internal.authorcontactother Raymond Donnelly, Accounting & Finance, University College Cork, Cork, Ireland. +353-21-490-3000 Email: rdonnelly@afis.ucc.ie en
dc.internal.availability Full text available en
dc.date.updated 2018-06-08T08:27:59Z
dc.description.version Accepted Version en
dc.internal.rssid 412811934
dc.description.status Peer reviewed en
dc.identifier.journaltitle International Journal of Disclosure and Governance en
dc.internal.copyrightchecked Yes en
dc.internal.licenseacceptance Yes en
dc.internal.IRISemailaddress RDonnelly@afis.ucc.ie en


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