We examine whether requiring versus allowing conditional capitalisation of development expenditure affects the extent to which capitalisation conveys more information about future earnings, relative to expensing. UK GAAP (SSAP 13) permitted, but not required, conditional capitalisation of...

We demonstrate that the uncertainty communicated by US R&D accounting is also risk relevant. First, we quantify the information on the uncertainty of future benefits through revisions of expectations regarding future cash flows. R&D significantly influences the market's revisions of expectations...

The rationale for conservatively expensing R&D investments under U.S. GAAP largely relies on the uncertainty of the R&D-related future benefits. We examine the temporal dimension of uncertainty reflecting the time distance between R&D expenditures and the realization of future benefits. We...

We show that trades by corporate insiders after an earnings announcement determine in part the extent of the post-earnings announcement drift anomaly. Contrarian trades mitigate the under-reaction to earnings announcements, and confirmatory trades allow for price discovery with price movements...

The objective of this paper is to assess whether the inclusion of improved estimates of the future in corporate annual financial statements has brought about greater international comparability. It is argued that including more relevant information in financial reporting enables users to...

This study focuses on the relation between the cost of equity capital and earnings expectations when the properties of accounting that determine earnings vary across different regulatory regimes. More particularly, it addresses the European setting where different types of GAAP regime have...