The information content of mandatory and discretionary non-GAAP earnings

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Title: The information content of mandatory and discretionary non-GAAP earnings
Description: PURPOSE – This paper aims to investigate the pricing of discretionary earnings in South Africa. This is a
unique setting, as South African listed firms also reportmandatory non-GAAP earnings (“headline earnings”).
DESIGN/METHODOLOGY/APPROACH – Results are based on multivariate regression analyses for South
African firms that report from 2010 to 2019.
FINDINGS – Findings show that the value-relevance of discretionary earnings exceeds that of both GAAP
earnings and headline earnings. In addition, placement of discretionary earnings reconciliations
communicates information about the decision-usefulness of earnings.
ORIGINALITY/VALUE – Discretionary earnings remain the most value-relevant earnings measure, despite the
divergent decision-useful characteristics offered by headline earnings and GAAP earnings. Therefore, the
most decision-useful earnings reflect unique industry or firm characteristics rather than the assurance arising
from regulation.; https://www.emerald.com/insight/0114-0582.htm; am2024; Accounting; None
Creator: Badenhorst, Wessel M.; Von Well, Rieka
Subject: Earnings; Non-GAAP; Value-relevance; Discretionary; Headline
Publisher: Emerald
Date: 2024-09-05T10:22:06Z; 2024-09-05T10:22:06Z; 2023-07
Type: Article
Format: application/pdf
Identifier: Badenhorst, W.M. & Von Well, R. 2023, 'The information content of
mandatory and discretionary non-GAAP earnings', Pacific Accounting Review, vol. 35, no. 3, pp. 451-476. DOI: 10.1108/PAR-07-2022-0102.; 0114-0582; 10.1108/PAR-07-2022-0102; http://hdl.handle.net/2263/98048
Language: en

Item sets: Accounting