Big Bath Accounting in Managerial Tone Following CEO Turnovers

2021 ◽  
Author(s):  
Wolfgang Breuer ◽  
Marcos Andrés Follonier ◽  
Andreas Knetsch
Keyword(s):  
Big Bath

scholarly journals Exemplifying the Effect of Big Bath Accounting in the Pandemic

2021 ◽  
Vol 2 (2) ◽  
pp. 3-16
Author(s):  
Valentin Burca ◽  
Dorel Mateș ◽  
Oana Bogdan
Keyword(s):  
Big Bath

scholarly journals Goodwill And Goodwill Write-Downs: Their Effects On Earnings Quality For 2008 And 2009

2011 ◽  
Vol 7 (11) ◽  
Author(s):  
Don E. Giacomino ◽  
Michael D. Akers
Keyword(s):  
Earnings Management ◽  
Earnings Quality ◽  
Pension Plan ◽  
Expected Returns ◽  
Balance Sheets ◽  
Big Bath

This paper examines goodwill on corporate balance sheets.  Specifically, the paper measures the extent to which goodwill exists on corporate balance sheets and the degree of goodwill write-downs that have occurred recently.   We report on our study and a study by Intangible Business, which show that many firms carry substantial amounts of goodwill on their 2008 balance sheets.  Thus, because of the recent downturn in the economy and the markets, the potential for big bath earnings management for 2008 and 2009 exists.   In addition, because of reductions in expected returns on pension plan assets, many firms are likely to record much higher pension expenses.   We expect that the combination of goodwill impairments and increased pension expense will have significant effects on both the amount and the quality of earnings for 2008 and, possibly, 2009.

The Big Bath House by Kyo Maclear

2021 ◽  
Vol 75 (2) ◽  
pp. 64-64
Author(s):  
Deborah Stevenson
Keyword(s):  
Big Bath

Big Bath Earnings Management: The Case Of Goodwill Impairment Under SFAS No. 142

2011 ◽  
Vol 20 (2) ◽  
Author(s):  
Charles E. Jordan ◽  
Stanley J. Clark
Keyword(s):  
Earnings Management ◽  
Compelling Evidence ◽  
Font Size ◽  
Goodwill Impairment ◽  
Current Period ◽  
Fortune 100 ◽  
Big Bath

<p class="MsoBodyText2" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-style: normal; mso-bidi-font-style: italic;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">The big bath theory of earnings management suggests that firms experiencing low earnings in a given year may take discretionary write downs to reduce even further the current period&rsquo;s earnings.<span style="mso-spacerun: yes;">&nbsp; </span>The notion is that the company and its management will not be punished proportionately more for the big hit it takes to its already depressed earnings.<span style="mso-spacerun: yes;">&nbsp; </span>This &ldquo;clearing of the decks&rdquo; makes it easier to generate higher profits in later years.<span style="mso-spacerun: yes;">&nbsp; </span>SFAS No. 142, with its new requirement to test goodwill annually for impairment, provided a unique opportunity to test this big bath theory.<span style="mso-spacerun: yes;">&nbsp; </span>Examining Fortune 100 companies, this study presents compelling evidence that the big bath theory is more than just a theory but is instead a practiced method of managing earnings.</span></span></span></p>

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