Detecting asset impairment earnings management on ifrs context: some evidence from greek listed companies
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Ημερομηνία
2014
Τίτλος Εφημερίδας
Περιοδικό ISSN
Τίτλος τόμου
Εκδότης
Δικαιώματα
Attribution-NonCommercial-NoDerivatives 4.0 Διεθνές
Άδειες
Παραπομπή
Παραπομπή
Περίληψη
The purpose of this study is two fold: (a) to bring on issues of asset impairment manipulation in the IFRS
context (b) to examine, any statistical inference validating impairment discretionary charges and firms’
earning experience. The Impairment Accounting Standard (IAS 36), enters new requirements for asset
impairment provided to satisfying accrued loss amounts. Earning Management through the use of asset
impairments within constrains of taking accounting process results to income manipulation representing (a)
an external demand to meet earnings forecasts (b) internal demand for communicating board’ level
performance. We expect to present a critical view of the earnings discretion and provide an answer on the
prevailing content of asset impairment. The sample constituted of 236 firms, listed in the Greek Stock
Exchange Market on the basis of impairment observations. We analyze the earnings levels for impairer
companies, for 2004-2012 years. Findings suggest (a) firms recording impairment charges possess lower
earnings than do their counterparts not recording write downs and (b) the impairment losses are likely
reported as timely opportunity to taking “big bath” and increasing future earnings. However we estimate
that Greek firms’ operating performance is engaged to earning adjustments on (a) taxable environment and
(b) new accounting rules liable to income strategies.