Defining, measuring, and modeling accruals: a guide for researchers

Chad R. Larson (), Richard Sloan () and Jenny Zha Giedt
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Chad R. Larson: University of Houston
Richard Sloan: University of Southern California

Review of Accounting Studies, 2018, vol. 23, issue 3, No 2, 827-871

Abstract: Abstract Research on accounting accruals is pervasive. Yet the measurement and modeling of accruals has developed in an ad hoc manner, resulting in a fragmented and incomplete body of research. Our goal is to rectify this situation by (i) providing a comprehensive definition of accruals, (ii) formulating a corresponding empirical measure of accruals, (iii) offering two decompositions of our measure that encapsulate the major classes of accruals studied elsewhere, (iv) combining and expanding prior models of the fundamental determinants of accruals into one parsimonious model, and (v) identifying the primary determinants of each of the major classes of accruals. We close by providing guidance for researchers in tailoring the selection of accruals to the research question at hand.

Keywords: Accruals; Operating accruals; Financial accruals; Conditional conservatism; Cash flows (search for similar items in EconPapers)
JEL-codes: C23 D21 G32 M41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (24)

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DOI: 10.1007/s11142-018-9457-z

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