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Earnings quality, accruals and subjective goodwill accounting

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  • Katsuo, Yuko

Abstract

This paper analyses accounting accruals that may relate to earnings quality and its information content. The characteristics specifying earning quality are discussed according to research surveys of earnings quality. These are compared with the characteristics of accounting income specified by the concept of ‘released from risks’ in ASBJ (2006). In this context, the conversion process of subjective goodwill, which is related to the allocation problem in accounting income and its relation to earnings quality, is focussed upon. The allocation problem is examined by clarifying the conversion process of subjective goodwill, and by highlighting the portion of the allocation error that reflects managerial discretion.

Suggested Citation

  • Katsuo, Yuko, 2008. "Earnings quality, accruals and subjective goodwill accounting," LSE Research Online Documents on Economics 6912, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:6912
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    File URL: http://eprints.lse.ac.uk/6912/
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    More about this item

    Keywords

    Accounting accruals; earnings quality; subjective goodwill; income measurement; allocation problem; value relevance; managerialdiscretion.;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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