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The impact of depreciation-type adjustments on the distribution of accounting earnings
Citation
Hillier, J and Willett, RJ, The impact of depreciation-type adjustments on the distribution of accounting earnings, Accounting and Business Research, 36, (4) pp. 309-335. ISSN 0001-4788 (2006) [Refereed Article]
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Copyright Statement
copyright 2006 Croner. CCH Group Limited.
DOI: doi:10.1080/00014788.2006.9730030
Abstract
Experimental computer simulation methods are used to demonstrate how a depreciation-type adjustment influences the distributional form of accounting earnings. The results confirm conjectures that earnings distributions generally, with or without depreciation adjustments, tend towards a normal form as a function of increasing 'activity' levels. They also indicate that depreciation is likely to accelerate the transition towards a normal form of activity levels increase and to transform a non-normal form to one that is significantly closer to the normal at relatively low activity levels. The impact of the fixed asset 'impairment' rules is also investigated. The results reported in the paper have implications for standard-setting, risk analysis and inference using accounting earnings and related numbers, including ratios based upon earnings.
Item Details
Item Type: | Refereed Article |
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Keywords: | depreciation-type adjustment, accounting earnings, earnings distributions, fixed asset impairment rules |
Research Division: | Commerce, Management, Tourism and Services |
Research Group: | Accounting, auditing and accountability |
Research Field: | Accounting, auditing and accountability not elsewhere classified |
Objective Division: | Expanding Knowledge |
Objective Group: | Expanding knowledge |
Objective Field: | Expanding knowledge in commerce, management, tourism and services |
UTAS Author: | Willett, RJ (Professor Roger Willett) |
ID Code: | 71266 |
Year Published: | 2006 |
Deposited By: | Research Division |
Deposited On: | 2011-07-12 |
Last Modified: | 2012-10-10 |
Downloads: | 1 View Download Statistics |
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