We investigate the impact of conditional conservation on the ability of accruals and its components to predict future cash flows. We first demonstrate that conditional conservatism has increased over the period from 1988 to 2013 due to an increase in timely loss recognition and asymmetric timely...

We examine why, as a summary statistic, earnings is better than cash flows at explaining contemporaneous returns despite being a worse predictor of future operating cash flows. Several studies compare the ability of earnings and operating cash flows to predict valuation-related outcome variables...