Are Asymmetrically Recognized Accruals Affected by Different Debt Contract Condition

Cite this:
Mei-Chu Huang, W. T. (2014). Are Asymmetrically Recognized Accruals Affected by Different Debt Contract Condition. Innovative Journal of Business and Management, 3(01). Retrieved from http://innovativejournal.in/index.php/ijbm/article/view/590
© 2022 Interactive Protocols
RIGHTS & PERMISSIONS
Article Views
200
Altmetric
1
Citations
-
LEARN ABOUT THESE METRICS
   PDF  

Abstract

This paper examines the role of economic conditions (economic gains and losses)
within the Taiwan stock market, with the results of the accruals models indicating that
firms in Taiwan demonstrate more timely recognition of losses than gains. This result
is similar to the findings of Ball and Shivakumar (2006) who similarly examined the
U.S. firms. We also separate the sample into two groups (better or worse debt contract
conditions) to determine whether this asymmetric recognition of accruals by firms is
affected by their debt contract condition. The results reveal that firms in Taiwan with
a worse debt contract condition have much less incentives to use accruals to hide their
economic losses than firms with a better debt contract condition; that is, firms with a
worse debt contract condition have greater incentives to conservatism recognize
accruals.
Keywords: Accruals models, Asymmetrically recognized accruals, Debt contract
condition.

KEYWORDS:

 Special Issue

Article Metrics Graph

Chart Graph | Range Graph

Content

Section

Source

License

COPYRIGHT AGREEMENT AND AUTHORSHIP RESPONSIBILITY

 

All paper submissions must carry the following duly signed by all the authors:

“I certify that I have participated sufficiently in the conception and design of this work and the analysis of the data (wherever applicable), as well as the writing of the manuscript, to take public responsibility for it. I believe the manuscript represents valid work. I have reviewed the final version of the manuscript and approve it for publication. Neither has the manuscript nor one with substantially similar content under my authorship been published nor is being considered for publication elsewhere, except as described in an attachment. Furthermore I attest that I shall produce the data upon which the manuscript is based for examination by the editors or their assignees, if requested.”