Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/187683
Authors: 
Li, Nan
Su, Hongtong
Dong, Wanqing
Zhu, Kai
Year of Publication: 
2018
Citation: 
[Journal:] China Journal of Accounting Research [ISSN:] 1755-3091 [Volume:] 11 [Year:] 2018 [Issue:] 1 [Pages:] 21-31
Abstract: 
This article discusses the effects of non-recurring profits and losses on statement users' decision-making processes from the perspective of securities analysts. We examine the relationship between analysts' forecast revisions and firms' non-recurring earnings. We find that 1) non-recurring gains and losses can influence analysts' earnings forecast revision; 2) compared with non-recurring items resulting from policy changes, analysts are more concerned about those attributed to changes in business scope; 3) if listed companies use non-recurring items to turn losses into gains during earnings management, it will weaken the effects of non-recurring items on analysts' earnings forecast revision. The results suggest that non-recurring items that result from changes in business scope incorporate information that users need for the future operation of the business. This article verifies the information relevance of non-recurring items and provides evidence for the necessity of non-recurring item disclosure.
Subjects: 
Non-recurring items
Earnings forecasts
Revisions
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/4.0/
Document Type: 
Article
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