Should Extraordinary Items Be Reinstated?

Authors

  • Khaled Elkhal The University of Southern Indiana

DOI:

https://doi.org/10.33423/jabe.v23i8.4880

Keywords:

business, economics, extraordinary items, Accounting Standards Update 2015-01, earnings management, logit regression, panel data regression

Abstract

Given the complexity accountants face in identifying and reporting extraordinary items, the FASB decided to eliminate the reporting requirement in 2015. This decision has merely shifted the burden from the internal accountants to the outside investors. This change adds little value to the financial community and should be reconsidered. A main argument against reinstating the reporting requirement, perhaps, is the tendency of managers to deploy extraordinary items for earnings management purposes. This paper investigates the earnings management issue using a logit regression and a panel regression model. The findings do not point towards earnings management being a motive behind reporting extraordinary items.

Downloads

Published

2021-12-29

How to Cite

Elkhal, K. (2021). Should Extraordinary Items Be Reinstated?. Journal of Applied Business and Economics, 23(8). https://doi.org/10.33423/jabe.v23i8.4880

Issue

Section

Articles