Conservatism and Debt

Anne Beatty, Joseph Weber and Jeff Jiewei Yu ()

Journal of Accounting and Economics, 2008, vol. 45, issue 2-3, pages 154-174

Abstract: Despite the unquestionable influence of conservatism, disagreement remains about what economic demands lead to financial reporting conservatism. Research examining lenders' demands for reporting conservatism has been questioned for ignoring conservative contract modifications. We document that these modifications exist but are not ubiquitous. We find contract modifications are more likely when agency costs are higher and litigation, tax and equity demands for conservatism are lower. However, we find a positive association between unexplained reporting conservatism and contract modifications, suggesting contractual modifications alone do not fulfill lenders' demands for conservatism.

Date: 2008

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V87 ... 133f399b041f2270f7c6
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:jaecon:v:45:y:2008:i:2-3:p:154-174

Access Statistics for this article

Journal of Accounting and Economics is edited by J. L. Zimmerman, S. P. Kothari, T. Z. Lys and R. L. Watts

More articles in Journal of Accounting and Economics from Elsevier
Series data maintained by Heidi Boesdal ().