Journal article
Changes in the value-relevance of earnings and book values over the past forty years
Journal of accounting & economics, Vol.24(1), pp.39-67
12/01/1997
DOI: 10.1016/S0165-4101(97)00015-3
Abstract
This paper investigates systematic changes in the value-relevance of earnings and book values over time. We report three primary findings. First, contrary to claims in the professional literature, the combined value-relevance of earnings and book values has not declined over the past forty years and, in fact, appears to have increased slightly. Second, while the incremental value-relevance of ‘bottom line’ earnings has declined, it has been replaced by increasing value-relevance of book values. Finally, much of the shift in value-relevance fiom earnings to book values can be explained by the increasing frequency and magnitude of one-time items, the increasing frequency of negative earnings, and changes in average firm size and intangible intensity across time.
Details
- Title: Subtitle
- Changes in the value-relevance of earnings and book values over the past forty years
- Creators
- Daniel W. Collins - University of IowaEdward L. Maydew - University of IowaIra S. Weiss - University of Chicago
- Resource Type
- Journal article
- Publication Details
- Journal of accounting & economics, Vol.24(1), pp.39-67
- DOI
- 10.1016/S0165-4101(97)00015-3
- ISSN
- 0165-4101
- eISSN
- 1879-1980
- Publisher
- Elsevier B.V
- Number of pages
- 29
- Language
- English
- Date published
- 12/01/1997
- Academic Unit
- Accounting
- Record Identifier
- 9984962550202771
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