Suchergebnisse

ABSTRACTIn 2007, the Securities and Exchange Commission (SEC) eliminated the 20-F requirement to reconcile IFRS financial disclosures to U.S. GAAP. We find that this change in SEC regulation is associated with an overall decrease in the international asset allocation of U.S. institutional investors in European Union (E.U.) firms that are cross-listed on U.S. stock exchanges. We also find that U.S. mutual fund investors were more likely to invest in firms in countries with greater levels of investor protection and higher global visibility in the post-elimination period. A learning effect (measured as the length of time a firm is cross-listed on a U.S. stock exchange) is not, however, associated with U.S. institutional ownership. These results are robust to tests involving removal of OTC ADRs, firm-level controls, country controls, and financial controls resulting from the elimination of the 20-F reconciliation. Our results suggest that the increased information processing costs were not offset by information preparation cost savings. Our results indicate that the elimination of the 20-F reconciliation of IFRS to U.S. GAAP resulted in a loss of valuable information for U.S. institutional investors and thereby resulted in a divestment in cross-listed E.U. firms.

Purpose
This paper aims to examine the association of accruals and disaggregated pension components with future cash flows and also to investigate whether investors distinguish between pension information that is recognized (SFAS 158) versus disclosed (SFAS 132).


Design/methodology/approach
Regression analysis is used with a proxy for expected future cash flows as the dependent variable, and the components of pension disclosures as well as controls for the 2008-2009 financial crisis as the independent variables.


Findings
The results reveal that incorporating disaggregated pension components increases the ability to predict future cash flows, and that investors attach different pricing multiples to the various components in the models. The authors also find that during the 2008-2009 financial crisis, the signs of the coefficients on these components changed. Finally, the results indicate that investors assign more significance to pension accounting information that is recognized, as opposed to disclosed, and that disclosure affects the allocation of pension assets.


Originality/value
The authors provide empirical support for the conjecture posited by Amir and Benartzi (1998) that the prediction of future cash flows will be enhanced by the incorporation of the components of pension assets and liabilities. Importantly from a standard setting perspective, the authors also find evidence that investors assign more significance to pension accounting information that is recognized in the financial statements than to pension information that is disclosed.

In this paper, we examine the information content and value relevance of research and development (R&D) costs before and after the SEC eliminated the 20-F reconciliation to U.S. GAAP for Foreign Public Issuers (FPIs). Prior to the elimination both FPIs and U.S. firms experienced an increase in the indirect effect of R&D on operating income. After the requirement was eliminated, the direct effect increased for FPIs and the indirect effect decreased. This is in contrast to U.S. firms who experienced a continued increase in the indirect effect. This shift indicates there was a loss of informativeness in the R&D disclosures for FPIs.