Recent studies indicate that both current Ramp;D investment levels and current or recent changes in Ramp;D investment are positively associated with subsequent excess (risk-adjusted) stock returns. The tentative explanation offered for these results is that shares of Ramp;D-intensive firms are...

Numerous studies have used the proportion of anomalous returns earned during earnings announcement intervals as evidence to distinguish between risk and mispricing explanations for those returns. This approach implicitly assumes that returns expected as compensation for risk-bearing are earned...

This study investigates the extent to which potential financial reporting benefits from capitalizing and amortizing Ramp;D costs depend on increasing the level of discretion permitted to financial statement preparers. To provide evidence on this issue, we examine the impact of alternative...

In 1999, the Financial Accounting Standards Board proposed changes in the accounting for business combinations and intangibles that would significantly increase the level of goodwill amortization in corporate income statements. In an effort to make goodwill accounting more transparent, the...

In this paper, we provide evidence on the potential informational benefits of capitalizing and amortizing Ramp;D costs by comparing the extent to which financial statements that reflect alternative Ramp;D accounting schemes explain the cross-sectional distribution of share prices. We find that...

Investment professionals often suggest that current accounting earnings can be improved upon as an indicator of share values by substituting capital expenditures for reported depreciation. To provide evidence on the effect of this substitution, we compare the ability of earnings measures based...