Cash Flow Accounting and the Cost of Debt
Author:
, , , ,Year
: 2013
Abstract: The aim of this study is to examine why firms may manipulate not just their earnings but also
their cash flows, and to investigate the effects of this behaviour on the cost of debt. The study
highlights the discretion afforded in IFRS and US GAAP with regard to the reporting of
operating cash flow. Using samples of firms in the UK and the USA, the results show that,
for the ten years to 2010, the cost of debt has a significantly positive association with the
managed (abnormal) component of operating cash flow. The market is more likely to
incorporate abnormal operating cash flow information into pricing when firms are
experiencing financial problems, especially when such companies are faced with low cash
flows.
their cash flows, and to investigate the effects of this behaviour on the cost of debt. The study
highlights the discretion afforded in IFRS and US GAAP with regard to the reporting of
operating cash flow. Using samples of firms in the UK and the USA, the results show that,
for the ten years to 2010, the cost of debt has a significantly positive association with the
managed (abnormal) component of operating cash flow. The market is more likely to
incorporate abnormal operating cash flow information into pricing when firms are
experiencing financial problems, especially when such companies are faced with low cash
flows.
Keyword(s): Key words: Cost of debt,Cash flow manipulation,Abnormal operating cash flow,GAAP
discretion
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Cash Flow Accounting and the Cost of Debt
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| contributor author | محمود لاری دشت بیاض | en |
| contributor author | Professor Stuart McLeay | en |
| contributor author | محمدحسین ودیعی نوقابی | en |
| contributor author | Mahmoud Lari Dashtbayaz | fa |
| contributor author | Mohammad Hossein Vadiei Nowghabi | fa |
| date accessioned | 2020-06-06T14:10:42Z | |
| date available | 2020-06-06T14:10:42Z | |
| date copyright | 5/6/2013 | |
| date issued | 2013 | |
| identifier uri | https://libsearch.um.ac.ir:443/fum/handle/fum/3385704?locale-attribute=en | |
| description abstract | The aim of this study is to examine why firms may manipulate not just their earnings but also their cash flows, and to investigate the effects of this behaviour on the cost of debt. The study highlights the discretion afforded in IFRS and US GAAP with regard to the reporting of operating cash flow. Using samples of firms in the UK and the USA, the results show that, for the ten years to 2010, the cost of debt has a significantly positive association with the managed (abnormal) component of operating cash flow. The market is more likely to incorporate abnormal operating cash flow information into pricing when firms are experiencing financial problems, especially when such companies are faced with low cash flows. | en |
| language | English | |
| title | Cash Flow Accounting and the Cost of Debt | en |
| type | Conference Paper | |
| contenttype | External Fulltext | |
| subject keywords | Key words: Cost of debt | en |
| subject keywords | Cash flow manipulation | en |
| subject keywords | Abnormal operating cash flow | en |
| subject keywords | GAAP discretion | en |
| identifier link | https://profdoc.um.ac.ir/paper-abstract-1035797.html | |
| conference title | 36th Annual congress European Accounting Association | en |
| conference location | paris | fa |
| identifier articleid | 1035797 |