Characteristics of firms electing early adoption of SFAS 52
- 30 June 1986
- journal article
- Published by Elsevier BV in Journal of Accounting and Economics
- Vol. 8 (2), 143-158
- https://doi.org/10.1016/0165-4101(86)90015-7
Abstract
In 1981 the FASB issued a new standard for accounting for foreign currency translation, SFAS 52. The standard provided a gradual transition period, allowing firms to select from several possible adoption dates. This study extends the research on the positive theory of accounting choice to examine the factors associated with a management's choice of adoption date. The comparison reveals that early adopters were smaller, typically decreased in pre-charge earnings the year before adoption, had less stock owned by directors and officers, and were more constrained on dividend payouts and interest coverage ratios than later adopters.Keywords
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