We examine whether managers' decisions to capitalize or expense R&D expenditures convey information about the future performance of the firm. Focusing on a French setting where managers can choose to capitalize R&D expenditures under certain circumstances, we find that, after controlling for...

This paper examines the impact of the accounting flexibility offered by IFRS 1 during the 2005 mandatory adoption of IFRS in the European Union. Same year reconciliations between local GAAP and IFRS are used on a sample of 1,635 European firms to determine the nature and extent of their use in...

Prior research provides mixed evidence on whether the transition to IAS/IFRS deters or contributes to greater earnings management (earnings smoothing). The dominant explanation for the conflicting results is self-selection. Early voluntary adopters had incentives to increase the transparency of...