Document Type
Article
Source of Publication
China Journal of Accounting Research
Publication Date
6-1-2024
Abstract
We investigate how the accounting treatment of intangible assets on managers’ likelihood of issuing voluntary earnings guidance (MEF). We find that unrecognized intangibles (immediately expensed) are negatively associated with MEF issuance, while recognized intangibles (capitalized) show a positive association. These findings hold across various factors such as analysts’ coverage, industry type and for a subsample that excludes software firms permitted to capitalize software development costs under SFAS No. 86. In additional, we investigate the cross-sectional determinants of MEF issuance based on the characteristics of firm intangibility. We find a significant increase in the likelihood of MEF issuance for higher unrecognized intangibles with greater earnings uncertainty. This suggests that managers may prioritize delivering value-relevant information to market participants to alleviate uncertainty.
DOI Link
ISSN
Publisher
Elsevier BV
Volume
17
Issue
2
Disciplines
Business
Keywords
Information asymmetry, Intangibles, Management earnings forecasts, Uncertainty, Voluntary disclosures
Scopus ID
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Recommended Citation
Khallaf, Ashraf and Kannan, Yezen, "Intangibles and management earnings forecasts" (2024). All Works. 6560.
https://zuscholars.zu.ac.ae/works/6560
Indexed in Scopus
yes
Open Access
yes
Open Access Type
Hybrid: This publication is openly available in a subscription-based journal/series