Earnings components and the asymmetric timeliness of earnings: The case of FRS 3 in the UK Article

Chan, ALC, Lin, SWJ, Strong, N. (2011). Earnings components and the asymmetric timeliness of earnings: The case of FRS 3 in the UK . ACCOUNTING AND BUSINESS RESEARCH, 41(4), 393-410. 10.1080/00014788.2011.573662

cited authors

  • Chan, ALC; Lin, SWJ; Strong, N

authors

abstract

  • We exploit a unique setting to examine how an accounting regulation change affects the asymmetric timeliness of earnings. Financial Reporting Standard No. 3: Reporting Financial Performance (FRS 3) changed the way listed UK companies recognised bad news through ordinary or extraordinary items. FRS 3 tightened the definition of extraordinary items but gave wider discretion in classifying exceptional items. The results were that, after FRS 3, the asymmetric timeliness of earnings before extraordinary items increased and the association of earnings conservatism with discretionary accruals was weaker. © 2011 Taylor & Francis.

publication date

  • September 1, 2011

published in

Digital Object Identifier (DOI)

start page

  • 393

end page

  • 410

volume

  • 41

issue

  • 4