Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Article
  • Contemporary Accounting Research

Signaling Firm Performance Through Financial Statement Presentation: An Analysis Using Special Items

By: Edward J. Riedl and Suraj Srinivasan
  • Format:Print
ShareBar

Abstract

This paper investigates whether managers' presentation of special items within the financial statements reflects economic performance or opportunism. Specifically, we assess special items presented as a separate line item on the income statement (income statement presentation) to those aggregated within another line item with disclosure only in the footnotes (footnote presentation). Our study is motivated by standard-setting interest in performance reporting and financial statement presentation, as well as prior research investigating managers' presentation choices in other contexts. Empirical results reveal that special items receiving income statement presentation are less persistent relative to those receiving footnote presentation. These results are consistent across numerous alternative specifications. Overall, the findings are consistent with managers using the income statement versus footnote presentation to assist users in identifying those special items most likely to differ from other components of earnings-that is, for informational, as opposed to opportunistic, motivations.

Keywords

Managerial Roles; Financial Statements; Economics; Performance; Research; Opportunities; Business Earnings; Motivation and Incentives

Citation

Riedl, Edward J., and Suraj Srinivasan. "Signaling Firm Performance Through Financial Statement Presentation: An Analysis Using Special Items." Contemporary Accounting Research 27, no. 1 (Spring 2010): 289–332.
  • SSRN
  • Find it at Harvard

About The Authors

Edward J. Riedl

→More Publications

Suraj Srinivasan

Accounting and Management
→More Publications

More from the Authors

    • April 2023
    • Faculty Research

    Strive Asset Management

    By: Suraj Srinivasan, Lynn S. Paine and Aldo Sesia
    • March 2023
    • Faculty Research

    A Primer on OKRs

    By: Suraj Srinivasan and Li-Kuan (Jason) Ni
    • March 2023
    • Faculty Research

    Hikma Pharmaceuticals Governance Journey

    By: Suraj Srinivasan and Jonah Goldberg
More from the Authors
  • Strive Asset Management By: Suraj Srinivasan, Lynn S. Paine and Aldo Sesia
  • A Primer on OKRs By: Suraj Srinivasan and Li-Kuan (Jason) Ni
  • Hikma Pharmaceuticals Governance Journey By: Suraj Srinivasan and Jonah Goldberg
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College