Core Earnings: New Data and Evidence

2019 ◽  
Author(s):  
Ethan Rouen ◽  
Eric C. So ◽  
Charles C. Y. Wang
Keyword(s):  
Core Earnings

Core earnings: New data and evidence

2021 ◽  
Author(s):  
Ethan Rouen ◽  
Eric C. So ◽  
Charles C.Y. Wang
Keyword(s):  
Core Earnings

scholarly journals Another Look at the Macroeconomic Information Content of Aggregate Earnings: Evidence from the Labor Market

2020 ◽  
Author(s):  
Rebecca N. Hann ◽  
Congcong Li ◽  
Maria Ogneva
Keyword(s):  
Labor Market ◽  
Information Content ◽  
Job Creation ◽  
Job Destruction ◽  
Special Items ◽  
Macroeconomic Information ◽  
Earnings Components ◽  
Aggregate Earnings ◽  
Core Earnings ◽  
Near Term

We examine the macroeconomic information content of aggregate earnings from the labor market's perspective. We use insights from the labor economics literature to characterize the information contained in aggregate GAAP earnings and its components that is relevant for predicting aggregate job creation and destruction. Our results suggest that not only does aggregate earnings news convey information about future labor market aggregates, but its information content is incremental to other macroeconomic variables at near-term horizons. Further, the source of this information stems primarily from two earnings components: aggregate core earnings and special items. Shocks to core earnings signal persistent changes in economy-wide profitability that predict aggregate job creation up to four quarters ahead, while shocks to special items predict job destruction up to one quarter. Taken together, our results suggest that aggregate earnings contain useful information about future labor market conditions, with the nature of such information varying across earnings components.

Fixing the Core, Earnings Management, and Sustainable Emergence From Financial Distress: Evidence From China’s Special Treatment System

2021 ◽  
pp. 0148558X2110511
Author(s):  
Jiao Jing ◽  
Kenneth Leung ◽  
Jeffrey Ng ◽  
Janus Jian Zhang
Keyword(s):  
Earnings Management ◽  
Financial Distress ◽  
Operating Efficiency ◽  
Special Treatment ◽  
Multiple Stakeholders ◽  
Listed Firms ◽  
The Core ◽  
Distressed Firms ◽  
Core Earnings

Throughout their business life cycle, firms may experience financial distress. Successful emergence from such distress is important to their multiple stakeholders. Using a sample of publicly listed firms in China that emerged from Special Treatment (an indicator of delisting risk), we focus on the key actions such firms take prior to emergence, namely, fixing the core of the business and earnings management. We examine how these actions are associated with sustainable emergence, which we define as emergence from Special Treatment without reentry in the next 5 years. Consistent with the expectation that shortcut fixes to problems do not yield a long-term solution, we find that repairing the core of the business by improving operating efficiency is positively associated with sustainable emergence, whereas earnings management is negatively associated with it. We also find that the positive (negative) association between fixing the core (earnings management) and sustainable emergence is pronounced only for state-owned enterprises. Our article adds to the limited literature that examines issues related to distressed firms’ sustainable turnaround.

Managing Earnings Using Classification Shifting: Evidence from Quarterly Special Items

2010 ◽  
Vol 85 (4) ◽  
pp. 1303-1323 ◽  
Author(s):  
Yun Fan ◽  
Abhijit Barua ◽  
William M. Cready ◽  
Wayne B. Thomas
Keyword(s):  
Fourth Quarter ◽  
Positive Relation ◽  
Cross Sectional ◽  
Earnings Expectations ◽  
Special Items ◽  
The Core ◽  
Classification Shifting ◽  
Earnings Benchmarks ◽  
Core Earnings

ABSTRACT: McVay (2006) concludes that managers opportunistically shift core expenses to special items to inflate current core earnings, resulting in a positive relation between unexpected core earnings and income-decreasing special items. However, she further notes that this relation disappears when contemporaneous accruals are dropped from the core earnings expectations model. McVay (2006) calls for research to improve the core earnings expectations model and to provide additional cross-sectional tests of classification shifting. Using a core earnings expectations model that is not dependent on accrual special items, we show that classification shifting is more likely in the fourth quarter than in interim quarters. We also find more evidence of classification shifting when the ability of managers to manipulate accruals appears to be constrained and in meeting a range of earnings benchmarks. Overall, our evidence provides broad support for McVay’s (2006) conclusion that managers engage in classification shifting. Our study also sheds new understanding of the conditions under which managers are more likely to employ classification shifting.

Income Classification Shifting and Mispricing of Core Earnings

2015 ◽  
pp. 0148558X1557173 ◽  
Author(s):  
Elio Alfonso ◽  
C. S. Agnes Cheng ◽  
Shanshan Pan
Keyword(s):  
Classification Shifting ◽  
Core Earnings

scholarly journals Female CEOs and Core Earnings Quality: New Evidence on the Ethics Versus Risk-Aversion Puzzle

2018 ◽  
Vol 160 (2) ◽  
pp. 515-534 ◽  
Author(s):  
Alaa Mansour Zalata ◽  
Collins Ntim ◽  
Ahmed Aboud ◽  
Ernest Gyapong
Keyword(s):  
Risk Aversion ◽  
Earnings Quality ◽  
Female Ceos ◽  
Core Earnings ◽  
New Evidence ◽  
Versus Risk

scholarly journals Non-GAAP Financial Measures: Evidence From Canada

2021 ◽  
Author(s):  
Sameera Hassan
Keyword(s):  
Stock Exchange ◽  
Exploratory Research ◽  
Toronto Stock Exchange ◽  
Financial Measures ◽  
Generally Accepted Accounting Principles ◽  
Regulatory Guidance ◽  
Pro Forma Earnings ◽  
Financial Disclosures ◽  
Core Earnings ◽  
Regulatory Proposals

This paper investigates non-GAAP financial measures voluntarily reported by Canadian companies listed on Toronto stock exchange (TSX) and Toronto Ventures Exchange (TSXV) for the year 2017. Non-GAAP measures are those that do not adhere to the requirements of generally accepted accounting principles (GAAP) and are used to communicate those aspects of firms’ operations which the firms see as relevant for the users of financial statements. This study is an exploratory research which describes current firm practices in reporting non-GAAP financial measures among three industry groups, namely Real Estate, Blockchain/Cryptocurrency and Cannabis firms. This paper also assesses the quality of non-GAAP financial disclosures in accordance with the regulatory guidance. The study is motivated by recent regulatory proposals issued by the Canadian Securities Administrators (CSA), under the National Instrument NI 52-112 and by the Accounting Standards Board (AcSB) pertaining to reporting non-GAAP performance measures. The main contribution of this study is a detailed content analysis of a sample of Canadian firms. My analysis of hand collected data from the Management Discussion and Analysis (MD&A) indicates a plethora of reported “non-GAAP financial measures” disclosed by companies. The analysis also indicates that firms are falling short on parameters such as understandability, comparability, standardization, consistency and persistence of non-GAAP financial measures which are essential under the existing guidelines, and that regulation of non-GAAP financial measures would be beneficial. The study’s findings may be relevant to regulators for formulating guidance on reporting non-GAAP measures and identifies areas of potential future studies in the area of non-GAAP financial measures. Keywords: Non-GAAP financial measures, Non-GAAP earnings, Pro forma earnings, Non-IFRS measures, Street earnings, Core earnings, Adjusted earnings and NI 52-112.

Sign in / Sign up

Export Citation Format

Share Document