Accounting for Asset Sales: The Effect on Earnings Smoothing

The effect of earnings management through assets sales on Canadian stocks

Corporate Ownership and Control ◽

10.22495/cocv6i4c1p6 ◽

2009 ◽

Vol 6 (4) ◽

pp. 218-233 ◽

Cited By ~ 1

Author(s):

Said Elfakhani ◽

Ola Kurdi

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Positive Relationship ◽

Negative Relationship ◽

Asset Sales ◽

Earnings Per Share ◽

Fixed Assets ◽

Earnings Smoothing ◽

Equity Ratio ◽

Bonus Plans

This paper tests the earnings-smoothing and the debt-equity hypotheses using a sample of Canadian firms engaging in sales of long-lived assets and investments assets. findings show there is a negative relationship between income from asset sales and change in earnings per share exclusive of income from asset sales, as well as a positive relationship between leverage (proxied by debt-equity ratio) and income from asset sales. Yet, Canadian firms also report zero income or losses more often than gains as opposed to mostly gains from such sales reported by US firms, suggesting that they may be using asset sales proceeds for other corporate governance-related reasons than earnings smoothing, including Canadian tax policies (when selling fixed-assets), liquidity needs, avoidance of debt covenants violation, and level of management bonus plans. We also notice some differences between Canadian firms and their US counterparts that may explain some differences in their results.

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The Long-Run Stock Returns Following Asset Sales: A Test of the Windows of Opportunity Hypothesis

Productivity Review ◽

10.15843/kpapr.25.3.201109.381 ◽

2011 ◽

Vol 25 (3) ◽

pp. 381-399

Author(s):

Yong Hyeon Kim

Keyword(s):

Stock Returns ◽

Asset Sales ◽

Windows Of Opportunity ◽

Long Run

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Selling to Buy: Asset Sales and Method of Payment in M&As

SSRN Electronic Journal ◽

10.2139/ssrn.2703462 ◽

2015 ◽

Cited By ~ 1

Author(s):

Christos P. Mavis ◽

Nathan P. McNamee ◽

Dimitris Petmezas ◽

Nickolaos G. Travlos

Keyword(s):

Asset Sales ◽

Method Of Payment

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Empirical Analysis of Effects of SFAS No. 133 on Derivative Use and Earnings Smoothing

SSRN Electronic Journal ◽

10.2139/ssrn.616901 ◽

2004 ◽

Cited By ~ 1

Author(s):

Wei Li ◽

William W. Stammerjohan

Keyword(s):

Empirical Analysis ◽

Earnings Smoothing

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What is the Magic in Equity Deals? Theory and Evidence on the Means of Payment in Asset Sales

SSRN Electronic Journal ◽

10.2139/ssrn.675944 ◽

2004 ◽

Cited By ~ 1

Author(s):

Ulrich Hege ◽

Stefano Lovo ◽

Myron B. Slovin ◽

Marie E. Sushka

Keyword(s):

Asset Sales

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Equity and Cash in Intercorporate Asset Sales: Theory and Evidence

SSRN Electronic Journal ◽

10.2139/ssrn.967540 ◽

2006 ◽

Author(s):

Ulrich Hege ◽

Stefano Lovo ◽

Myron B. Slovin ◽

Marie E. Sushka

Keyword(s):

Asset Sales

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A neural computing-based cash price prediction using multi-layer perceptron (MLP) and feature selection for health economics

Current Signal Transduction Therapy ◽

10.2174/1574362414666191127111916 ◽

2019 ◽

Vol 14 ◽

Author(s):

Zinat Ansari

Keyword(s):

Feature Selection ◽

Health Economics ◽

Cash Flow ◽

Multi Layer Perceptron ◽

Asset Sales ◽

Fixed Asset ◽

Academic Fields ◽

Investment Returns ◽

Short And Long Term

Background: The present study proceeds to incorporate feature selection as a means for selecting the most relevant features affecting the prediction of cash prices in Iran in terms of health economics. Health economics are between academic fields that can aid in ameliorating conditions so as to perform better decisions in regards to the economy such as determining cash prices. Methods: Accordingly, a series of search algorithms, namely the Best-First, Greedy-Stepwise, and Ranker methods, are deployed in order to extract the most relevant features from among a 500 data samples. The validity of the methods was evaluated via the LMT procedure. The corresponding dataset used for this study constitutes a variety of features including net cash flow, dividends, revenue from short and long-term deposits, cash flow from investment returns, income tax, fixed asset purchases, fixed asset sales, long-term investment purchases, long-term investment sales, total cash flow from investment activities, financial facilities, and repayment of financial facilities. Results: The results were indicative of the superiority of the Ranker model using the RelieF-Attribute-Eval tool in Weka over the remaining classification methods. Ergo, the LMT approach could be employed to remove data redundancies and thereby accelerate the estimation process, while saving time and money. The results of the multi-layer perceptron (MLP) further confirmed the high accuracy of the proposed method in estimating cash prices. Conclusions: The present research attempted to reduce the volume of data required for predicting end cash by means of employing a feature selection so as to save both precious money and time.

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