An Examination of SFAS 146 Restructuring Charges*

2008 ◽  
Author(s):  
Yong Gyu Lee
Keyword(s):  
Restructuring Charges

Restructuring Charges and CEO Cash Compensation: A Reexamination

2003 ◽  
Vol 78 (1) ◽  
pp. 169-192 ◽  
Author(s):  
Davit Adut ◽  
William H. Cready ◽  
Thomas J. Lopez
Keyword(s):  
Adverse Effect ◽  
Executive Compensation ◽  
The Other ◽  
Cross Sectional ◽  
Factors Associated ◽  
Cash Compensation ◽  
Restructuring Charges ◽  
Restructuring Charge ◽  
A Charge ◽  
Compensation Committees

Prior research generally concludes that compensation committees completely shield executive compensation from the effect of restructuring charges on earnings. In contrast, we find that after controlling for the growth in annual inflation-adjusted CEO cash compensation, compensation committees only partially shield CEO compensation from the adverse effect of restructuring charges on earnings, on average. In further analyses, we identify factors associated with cross-sectional differences in the extent of shielding. Specifically, we find that compensation committees appear to: (1) completely shield initial and subsequent restructuring charges for CEOs with long tenure, provided that the firm had not recorded a charge in the two immediately prior years; (2) provide no shielding of subsequent restructuring charges taken by short-tenured CEOs if the firm reported a prior restructuring charge within two years of the current charge; (3) and partially shield the other categories of restructuring charges. Overall, this study provides evidence that compensation committees evaluate the context of each restructuring in determining the extent to which they will intervene to shield executive compensation from the effect of these charges.

Restructuring Charges, FAS 146, and the Accrual Anomaly

2017 ◽  
Vol 63 (11) ◽  
pp. 3654-3671 ◽  
Author(s):  
Sanjeev Bhojraj ◽  
Partha Sengupta ◽  
Suning Zhang
Keyword(s):  
Accrual Anomaly ◽  
Restructuring Charges

Negative Special Items and Future Earnings: Expense Transfer or Real Improvements?

2012 ◽  
Vol 87 (4) ◽  
pp. 1165-1195 ◽  
Author(s):  
William M. Cready ◽  
Thomas J. Lopez ◽  
Craig A. Sisneros
Keyword(s):  
Performance Improvement ◽  
Future Earnings ◽  
Goodwill Impairment ◽  
Special Items ◽  
Performance Improvements ◽  
Current Period ◽  
Future Performance ◽  
Improvement Effect ◽  
Restructuring Charges ◽  
Transfer Device

ABSTRACT Burgstahler et al. (2002) investigate the implications of special items for future earnings and report that firms use negative special items to accelerate the recognition of future expenses into the current period. That is, negative special items serve as an “inter-period transfer” device. We extend their analysis and find that earnings increase in post-special item quarters beyond the four quarters considered in Burgstahler et al. (2002). In particular, we find that future earnings increase over the subsequent 16 quarters by more than 130 percent of the reported negative special item. The earnings increases are greater for restructuring charges than for asset write-downs or goodwill impairment charges. Such patterns suggest that negative special items also signal real future performance improvements (i.e., performance improvement hypothesis) in addition to inter-period expense transfer (i.e., inter-period transfer hypothesis). Moreover, the real improvement effect appears to be driven by restructuring charges, the most prevalent type of special item.

Determinants Of Reporting Nonrecurring Charges Subsequent To Business Combinations

2011 ◽  
Vol 24 (3) ◽  
Author(s):  
Nina T. Dorata
Keyword(s):  
Institutional Ownership ◽  
Font Size ◽  
Target Firm ◽  
Business Combinations ◽  
Acquisition Period ◽  
Cash Compensation ◽  
Business Combination ◽  
Restructuring Charges ◽  
Asset Impairments

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: Times New Roman; font-size: x-small;">This study examines nonrecurring earnings charges following business combinations and the characteristics that influence their reporting.<span style="mso-spacerun: yes;">&nbsp; </span>The study uses a sample of 216 business combinations in which the acquiring firm reported either goodwill or other asset impairments or restructuring charges with respect to a target firm.<span style="mso-spacerun: yes;">&nbsp; </span>The results show that changes in the level of CEO cash compensation and institutional ownership are factors that are positively associated with nonrecurring earnings charges in the post-acquisition period.<span style="mso-spacerun: yes;">&nbsp; </span>The findings suggest that the transparency of nonrecurring transactions subsequent to a business combination is evident with the expense treatment of acquisition-related costs.</span></p>

Operational Restructuring Charges and Post-Restructuring Performance*

2004 ◽  
Vol 21 (3) ◽  
pp. 493-522 ◽  
Author(s):  
ROWLAND K. ATIASE ◽  
DAVID E. PLATT ◽  
SENYO Y. TSE
Keyword(s):  
Restructuring Charges
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