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A Description and Market Analysis of Write‐off Announcements
Author(s) -
Bunsis Howard
Publication year - 1997
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/1468-5957.00169
Subject(s) - cash flow , accounting , stock (firearms) , stock market , business , stock price , monetary economics , economics , financial economics , engineering , mechanical engineering , paleontology , horse , series (stratigraphy) , biology
This paper examines the stock market reaction to write‐off announcements. The increasing prevalence of write‐offs over the last decade has lead the Financial Accounting Standards Board to issue new guidelines on the accounting for write‐offs, and there has been much discussion about the stock market reaction to these types of announcements. By focusing on the expected cash flow implications of the different types of write‐off announcements, this paper documents that the stock price reaction to write‐off announcements is associated with the expected cash flow implications of the events surrounding the write‐off.