Following the work of Basu in 1997, the excess of the sensitivity of accounting earnings to negative share return over its sensitivity to positive share return (the Basu coefficient) has been interpreted as an indicator of conditional accounting conservatism. Although this interpretation is...

Following the financial and banking crisis of the late 2000s, accounting regulators sought to replace the incurred-loss method of loan-loss provisioning by a more forward-looking expected-loss method. Difficulties arose, including with respect to the weight that expected-loss provisioning should...