Accounting Ideas at Work Articles
February 06, 2007

A global look at environmental disclosures

Do laws or the marketplace motivate firms to release information about their behavior?

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August 30, 2007

Is cash really king in valuations, or do earnings trump all?

Forecast U.S. earnings are the closest proxy for share price when compared with actual financial statement variables. But do earnings beat forecast cash flows and dividends in an international sample?

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June 15, 2005

Earnings, cash flows and complementarity

The no-arbitrage principle implies that expected real cash flows — not earnings estimates — should determine asset prices. So why do earnings announcements move markets, while cash flow news is all but ignored?

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June 15, 2005

Shareholder value accounting

Stephen Penman explains how shareholder value accounting, an approach designed to accurately track the value of shareholders’ assets and liabilities, differs from traditional accounting methods.

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June 15, 2005

Customer lifetime value

Donald Lehmann discusses Managing Customers as Investments, a new book in which he and coauthor Sunil Gupta explain how to calculate and apply customer lifetime value.

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October 24, 2007

Bringing rigor to financial forecasting

By adding quantitative discipline to their number crunching, financial analysts may avoid the psychological biases that can lead to judgment errors.

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October 06, 2005

Disclosing risk

Risk disclosure decisions can have a direct impact on a firm’s cost of capital. When is it in managers’ best interests to voluntarily reveal information about firm-specific risk?

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November 15, 2007

Does shareholder voting curb CEO pay?

Giving shareholders a say may not have as much impact on executive compensation as investors would like.

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April 16, 2008

Using fair-value accounting, fairly

Doron Nissim and Stephen Penman explain why a new market-based approach to valuation may not be the best one for all industries.

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