Volltext verfügbar nach Anmeldung bzw. im Campus-Netz.
When Is Depreciation Meaningful in Valuation? Changing Valuation Weights for U.S. REITs and Non-REITs.
In: Journal of Accounting, Auditing & Finance, Jg. 38 (2023-07-01), Heft 3, S. 455-482
Online
academicJournal
Zugriff:
This article regresses the market value of equity on pre-depreciation income and on depreciation expense for capital-intensive firms, referring to the coefficients from our model as valuation weights. The valuation weight on depreciation expense versus the weight on pre-depreciation income are compared, to detect depreciation biases, over time and across sectors. Our model shows that the valuation weights on depreciation expense change over time, if the persistence of the cash flow components of net income varies over time and if the accrual for depreciation is inflexible (e.g., straight-line depreciation). For Real Estate Investment Trusts (REITs), we find the valuation weight on pre-depreciation income increases with industry upturns, while the valuation weight on depreciation expense decreases during upturns. This result is contrasted to the nearly equal valuation weights for the cash flow and depreciation components of earnings for Resource firms (e.g., mines) over time. We conjecture this is because depletion accounting flexibly allows for "depreciation" to exhibit less bias than in other sectors. In summary, actual depreciation practices influence time variation in the valuation of depreciation, a point which has been underappreciated in prior studies. [ABSTRACT FROM AUTHOR]
Copyright of Journal of Accounting, Auditing & Finance is the property of Sage Publications Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Titel: |
When Is Depreciation Meaningful in Valuation? Changing Valuation Weights for U.S. REITs and Non-REITs.
|
---|---|
Autor/in / Beteiligte Person: | Begley, Joy ; Chamberlain, Sandra ; Joo, Jeong Hwan |
Link: | |
Zeitschrift: | Journal of Accounting, Auditing & Finance, Jg. 38 (2023-07-01), Heft 3, S. 455-482 |
Veröffentlichung: | 2023 |
Medientyp: | academicJournal |
ISSN: | 0148-558X (print) |
DOI: | 10.1177/0148558X20975597 |
Schlagwort: |
|
Sonstiges: |
|