Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 23, 2022 erstellt
Beschreibung:
This paper examines the financial-reporting effects of ASC 606 (Revenue from Contracts with Customers) adoptions. Given the expected heterogeneous effects of ASC 606 for companies in different industries, we employ an industry-focused approach to evaluate the effects of ASC 606. Specifically, we focus on firms in the software industry, which is expected to be more significantly affected by ASC 606, and use firms in the electronic computer industry as a control group. We find the adoption of ASC 606 is associated with improvement in financial-statement comparability, informativeness, and mapping of revenue accruals to cash collections, for firms in the software industry compared with firms in the electronic computer industry. We also document significant increases in liquidity for software firms relative to electronic computer firms, reinforcing our inferences of ASC 606’s effects on improving financial reporting. Collectively, these findings based on the industry-focused approach suggest the importance of controlling for underlying economic comparability and pre-existing accounting differences, supporting that the evaluation of the effects of new accounting standards can benefit from a series of narrow-sample studies