Write-Down Timeliness, Line-of-Business Disclosures and Investors' Interpretations of Segment Divestiture Announcements
Texas Tech University - Area of Accounting
Steven L. Henning
Southern Methodist University
Journal of Business Finance & Accounting, Vol. 31, No. 9-10, pp. 1261-1299, November 2004
This paper examines investors' anticipation and subsequent interpretations of asset write-downs accompanying segment divestitures. Examining long-window returns cumulated over the two years preceding the year of divestiture, we hypothesize and find that investors anticipate write-downs of segment operating assets before divestiture and recognition occurs, with anticipation conditional on the timeliness of the write-down and prior disclosure of the segments' operating results under segment reporting rules. Short-window returns cumulated over the three days surrounding the announcement of the divestiture confirm that investor interpretations of asset write-downs are similarly contingent on write-down timeliness and prior disclosure.
Number of Pages in PDF File: 40
JEL Classification: M40, M41Accepted Paper Series
Date posted: November 29, 2004
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 1.234 seconds