The Effect of Fair Value versus Historical Cost Reporting Model on Analyst Forecast Accuracy

@inproceedings{Liang2014TheEO,
  title={The Effect of Fair Value versus Historical Cost Reporting Model on Analyst Forecast Accuracy},
  author={Lihong Liang and Edward J. Riedl},
  year={2014}
}
ABSTRACT: This paper examines how the reporting model for a firm's operating assets affects analyst forecast accuracy. We contrast U.K. and U.S. investment property firms having real estate as their primary operating asset, exploiting that U.K. (U.S.) firms report these assets at fair value (historical cost). We assess the accuracy of a balance-sheet-based forecast (net asset value, or NAV) and an income-statement-based forecast (earnings per share, or EPS). We predict and find higher NAV… CONTINUE READING

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