Are mandatory disclosure decisions made strategically? The case of SAB 74 estimates preceding adoption of FIN 48

Raquel Alexander, Mike Ettredge, Mary Stone and Lili Sun

Research in Accounting Regulation, 2011, vol. 23, issue 2, 160-166

Abstract: SEC Staff Accounting Bulletin No. 74 (SAB 74, U.S. Securities, 1987) requires registrants to provide information about the predicted financial statement effect of an enacted but not yet adopted accounting standard. The objectives of SAB 74 disclosures are to inform users the registrant will be required to adopt a new standard, and to assist users in assessing the impact of adoption on the registrant’s financial statements. Investors find SAB 74 disclosures useful for their decision-making (Davis-Friday et al., 1999, 2004). Some evidence suggests that the SEC also uses such disclosures (SEC, 2005). We investigate whether firms strategically disclose SAB 74 estimates in the context of one recently enacted accounting standard (ASC Topic 740, colloquially “FIN 48”).

Keywords: SAB 74; FIN 48; Mandatory disclosure; Compliance (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reacre:v:23:y:2011:i:2:p:160-166

DOI: 10.1016/j.racreg.2011.06.001

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