On Transitory Earnings

James A. Ohlson
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James A. Ohlson: New York University

Review of Accounting Studies, 1999, vol. 4, issue 3, No 2, 145-162

Abstract: Abstract The paper develops a concept of transitory earnings and contrasts this source of earnings to “core” (or recurring) earnings. It is shown that any two of the following three attributes of transitory earnings imply the third: (i) forecasting irrelevance with respect to next-period aggregate earnings, (ii) value irrelevance, and (iii) unpredictability. The paper makes the case that the current “dirty surplus” items make sense, especially if one expands the valuation perspective to also allow for agency considerations.

Keywords: Public Finance; Valuation Perspective; Aggregate Earning; Transitory Earning; Agency Consideration (search for similar items in EconPapers)
Date: 1999
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DOI: 10.1023/A:1009653114699

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