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- Title
The implementation effects of expanded consolidation: the case of consolidating special purpose entities.
- Authors
Luo, Ting; Warfield, Terry; Clarkson, Peter
- Abstract
This article examines the impact of FASB Interpretation No. 46 ( Revised), FIN 46( R), on perceived earnings informativeness of companies with special purpose entities ( SPEs). We find that the impact depends on the pre- FIN 46( R) incentives for using SPEs. The implementation of FIN 46( R) improves perceived earnings informativeness of companies that previously used SPEs less for the manipulation of financial reporting, but does not generate the same improvement for those otherwise. Furthermore, these differential effects are more pronounced when companies reacted to FIN 46( R) by restructuring their SPEs to keep them off financial statements.
- Subjects
MERGERS &; acquisitions; SPECIAL purpose entities (Corporations); FINANCIAL statements; FINANCIAL Accounting Standards Board; FASB pronouncement : Statement 46; ACCOUNTING standards
- Publication
Accounting & Finance, 2014, Vol 54, Issue 2, p539
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/acfi.12004