Consequences of the Financial Markets Authority Guidelines on the Relevance of Non-GAAP Earnings
In this paper, we investigate the consequences of the FMA guidelines on the relevance of non-GAAP earnings (NGE). These guidelines require firms NGE to conform to a certain code of practice to improve transparency and comparability. From our sample of 441 NGEs disclosed over the period 2011-2017, we...
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| Yayımlandı: | URI:https://journals.openedition.org/fcs, |
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| Asıl Yazarlar: | , |
| Materyal Türü: | Article ou chapitre numérique |
| Dil: | Anglais |
| Baskı/Yayın Bilgisi: |
Finance Contrôle Stratégie
2024
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| Konular: | |
| Online Erişim: | Accès Université d'Orléans et IFPM Accès Université d'Orléans et IFPM |
| Özet: | In this paper, we investigate the consequences of the FMA guidelines on the relevance of non-GAAP earnings (NGE). These guidelines require firms NGE to conform to a certain code of practice to improve transparency and comparability. From our sample of 441 NGEs disclosed over the period 2011-2017, we find a decrease in the relevance of NGE after the FMA guidelines were implemented. Nonetheless, we find that market participants reward NGE disclosed after 2015, when they are accompanied by “better quality” communication (i.e. compliance with the FMA guidelines). Also, we find a decrease in analysts’ forecasts dispersion after 2015, suggesting a reduction in information asymmetry following the application of FMA guidelines. |
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