Recognition of Long-lived Assets Impairment and Earnings Informativeness

• Main Authors: Yi-Chen Lee, 李宜蓁
• Other Authors: Ching-Lung Chen
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/80313462442745518674

碩士 === 國立雲林科技大學 === 會計系 === 103 === Based on the empirical model which is suggested by Tucker and Zarowin (2006), this study examines the effects of long-lived assets impairment recognized on the informativeness of current and future earnings.This study conjectures the recognition of long-lived assets impairment will result in including a noise earnings component in current income, which in turn, reducing the earnings informativeness of current earnings. Yet, note that if the long-lived assets impairment has been recognized, the carrying value of long-lived assets would be more reflect its real intrinsic fair value. It is expected the earnings informativeness of future earnings will be enhanced if the possible long-lived assets impairment is recognized. The empirical results support the conjectures and reveal the earnings informativeness of current (future) earnings is mitigated (improved) for firms with long-lived assets impairment. This study implements several diagnostic checks and demonstrates the empirical results are robust to various tests.