EMPIRICAL INVESTIGATION OF THE INFORMATION CONTENT OF SPECIFIC PRICE CHANGE DISCLOSURES (REPLACEMENT, CURRENT COST).
Item
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Title
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EMPIRICAL INVESTIGATION OF THE INFORMATION CONTENT OF SPECIFIC PRICE CHANGE DISCLOSURES (REPLACEMENT, CURRENT COST).
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Identifier
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AAI8515630
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identifier
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8515630
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Creator
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GOMA, AHMED TAWFIK.
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Contributor
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Steven Lilien
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Date
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1985
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Language
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English
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Publisher
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City University of New York.
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Subject
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Business Administration, Accounting
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Abstract
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The objective of this study is to reexamine the information content of replacement cost/current cost (RC/CC) disclosures using an improved methodology. The study adopted three alternative market expectations for RC/CC disclosures. The sample included 593 firms regardless of the firm's fiscal year-end. The test period covered 1977-1981. Screening efforts have been devoted to segregate depreciation from the cost of goods sold on the figures provided on the Compustat Replacement Cost tape.;Four hypotheses have been tested. The first hypothesis tested the information content of unexpected RC/CC income. The second hypothesis tested the segregations of elements of both unexpected realized holding gains (RHG) and unrealized holding gains (UHG). The third and fourth hypotheses tested the information content across 22 industries and across regulated and nonregulated portfolios, respectively.;Five regression models were undertaken to test these hypotheses. The dependent variable was the cumulative abnormal return (CAR), using weekly returns, for 52 weeks starting 36 weeks before the ending 16 weeks after fiscal year-end. Alternatively, three CAR sub-periods also were examined. The independent variables in the first three models tested the incremental information content of RHG, UHG and total holding gains (THG), respectively. The fourth and fifth models were undertaken to test the segregations of elements of both RHG and UHG, respectively. Intercept and slope dummy variables have been added to the first three models to test across 22 industries and also across regulated and nonregulated industries. Unexpected historical cost income and firm size variables were included in all regression models to control for their effects.;The results indicate that: (1) RHG were negatively significant in 1978-1980, (2) UHG were positively significant in 1979, and (3) THG were positively significant in 1978-79. The results also indicate that the information of segregated elements of both RHG and UHG were different from those of aggregated figures. Further, the results indicate that the information content of RC/CC disclosures differs across industry portfolios and across regulated/nonregulated industries. These results suggest rejections of the four hypotheses and show evidence of information content of RC/CC disclosures.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
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Program
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Business
