Discussion of 'Conditional and Unconditional Conservatism: Concepts and Modeling'

11 Pages Posted: 20 Apr 2014

See all articles by Sudipta Basu

Sudipta Basu

Temple University - Department of Accounting

Date Written: 2005

Abstract

Beaver and Ryan (Beaver, W. H., Ryan S. G. (2005). Review of Accounting Studies 10: (2/3)) algebraically model, simulate and graph the effects of various factors on the nonlinear earnings-return relation induced by conditional conservatism. Their analysis clarifies how conditional and unconditional conservatism are inter-related. I discuss why unconditional and conditional conservatism are more than mere substitutes, and provide evidence from the historical record. I then highlight a few areas for future modeling, before moving on to discuss potential empirical tests of their predicted relations. I identify some research questions and opportunities for future investigation.

Keywords: write-down, impairment buffer, contracting efficiency, regulation

JEL Classification: C52, H26, K23, M41

Suggested Citation

Basu, Sudipta, Discussion of 'Conditional and Unconditional Conservatism: Concepts and Modeling' (2005). Review of Accounting Studies, Vol. 10, No. 2/3, 2005. Available at SSRN: https://ssrn.com/abstract=2426667

Sudipta Basu (Contact Author)

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States
215.204.0489 (Phone)
215.204.5587 (Fax)

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