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- Title
Accrual Accounting and Equity Valuation.
- Authors
Ohlson, James A.; Xiao-Jun Zhang
- Abstract
The article discusses accrual accounting and equity valuation. The article focuses on accounting rules that preserve all value-relevant information as opertionalized by "efficient accounting." It is explained that efficient accounting is a concept that expresses a corporation's value as a weighted average of capitalized earnings and book value. It is suggested that efficient accounting differs from permanent earnings accounting and market-to-market accounting, which arise as theoretically interesting benchmarks. The article also examines the elements of efficient accounting rules from a traditional accounting theory perspectives.
- Subjects
ACCRUAL basis accounting; EQUITY (Law); VALUATION; BOOK value; ACCOUNTING; BENCHMARKING (Management); MANAGEMENT
- Publication
Journal of Accounting Research (Wiley-Blackwell), 1998, Vol 36, Issue 3, p85
- ISSN
0021-8456
- Publication type
Article
- DOI
10.2307/2491308