Abstract

http://ssrn.com/abstract=2791
 
 

Citations



 


 



Changes in the Value-Relevance of Earnings and Book Values over the Past Forty Years


Daniel W. Collins


University of Iowa - Department of Accounting

Edward L. Maydew


University of North Carolina at Chapel Hill

Ira S. Weiss


University of Chicago - Graduate School of Business; Columbia Business School - Department of Accounting

September 1996


Abstract:     
This paper investigates systematic changes in the value-relevance of earnings and book values over time. We report three primary findings. First, contrary to claims in the professional literature, the combined value-relevance of earnings and book values has not declined over the past forty years and, in fact, appears to have increased slightly. Second, while the incremental value-relevance of "bottom line" earnings has declined, it has been replaced by increasing value-relevance of book values. Finally, much of the shift in value-relevance from earnings to book values can be explained by the increasing frequency and magnitude of one-time items, the increasing frequency of negative earnings, and changes in average firm size across time.

JEL Classification: M41

working papers series


Not Available For Download

Date posted: November 4, 1996  

Suggested Citation

Collins, Daniel W. and Maydew, Edward L. and Weiss, Ira S., Changes in the Value-Relevance of Earnings and Book Values over the Past Forty Years (September 1996). Available at SSRN: http://ssrn.com/abstract=2791

Contact Information

Daniel W. Collins (Contact Author)
University of Iowa - Department of Accounting ( email )
108 Pappajohn Business Building
Iowa City, IA 52242-1000
United States
319-335-0912 (Phone)
319-335-1956 (Fax)
Edward L. Maydew
University of North Carolina at Chapel Hill ( email )
McColl Building
Chapel Hill, NC 27599-3490
United States
919-843-9356 (Phone)
HOME PAGE: http://www.kenan-flagler.unc.edu/faculty/directory/accounting/edward-maydew

Ira Samuel Weiss
University of Chicago - Graduate School of Business ( email )
5807 S. Woodlawn Ave
Chicago, IL 60637
United States
Columbia Business School - Department of Accounting ( email )
3022 Broadway
622 Uris Hall
New York, NY 10027
United States
HOME PAGE: http://www.gsb.columbia.edu/divisions/accounting/iweiss
Feedback to SSRN


Paper statistics
Abstract Views: 3,890

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.625 seconds