Do Firms Use Restructuring Charge Reversals to Meet Earnings Targets ?

@inproceedings{Moehrle2002DoFU,
  title={Do Firms Use Restructuring Charge Reversals to Meet Earnings Targets ?},
  author={Stephen R. Moehrle},
  year={2002}
}
  • Stephen R. Moehrle
  • Published 2002
Many firms that take restructuring charges reverse a portion of those restructuring charge accruals in a later quarter. These reversals increase net income, often substantially. In this study, I investigate whether restructuring charge reversals are associated with incentives to meet or exceed analysts’ forecasts, avoid earnings declines relative to prior-year levels, and avoid losses. I examine both the decision to record a reversal and the amount of the reversal, using a sample of 121… CONTINUE READING
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