Reversals of impairment charges under IAS 36: evidence from Malaysia

dc.contributor.authorShaari, Hasnah
dc.contributor.authorCao, Tongyu
dc.contributor.authorDonnelly, Ray
dc.date.accessioned2018-07-27T12:01:05Z
dc.date.available2018-07-27T12:01:05Z
dc.date.issued2017-06-30
dc.date.updated2018-06-08T08:27:59Z
dc.description.abstractWe 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.description.statusPeer revieweden
dc.description.versionAccepted Versionen
dc.format.mimetypeapplication/pdfen
dc.identifier.citationShaari, 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-yen
dc.identifier.doi10.1057/s41310-017-0022-y
dc.identifier.endpage240en
dc.identifier.issn1741-3591
dc.identifier.issn1746-6539
dc.identifier.issued3en
dc.identifier.journaltitleInternational Journal of Disclosure and Governanceen
dc.identifier.startpage224en
dc.identifier.urihttps://hdl.handle.net/10468/6509
dc.identifier.volume14en
dc.language.isoenen
dc.publisherPalgrave Macmillanen
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-yen
dc.subjectReversal of impairment lossesen
dc.subjectFirm performanceen
dc.subjectFinancial reporting standarden
dc.subjectAbnormal accrualsen
dc.subjectEarnings managementen
dc.subjectMalaysiaen
dc.titleReversals of impairment charges under IAS 36: evidence from Malaysiaen
dc.typeArticle (peer-reviewed)en
Files
Original bundle
Now showing 1 - 1 of 1
Loading...
Thumbnail Image
Name:
HTRIJDGNOV15_(1).pdf
Size:
294.93 KB
Format:
Adobe Portable Document Format
Description:
Accepted Version
License bundle
Now showing 1 - 1 of 1
Loading...
Thumbnail Image
Name:
license.txt
Size:
2.71 KB
Format:
Item-specific license agreed upon to submission
Description: