Discretionary Write-downs of Impaired Assets: Evidence from Public Listed Companies in Poland
Discretionary Write-downs of Impaired Assets: Evidence from Public Listed Companies in Poland

Summary/Abstract: The main aim of the article is to investigate the reporting of write-offs due to asset impairment by public listed companies in Poland. On the basis of related studies, the empirical thesis is posed as follows: H1 – the practice of reporting asset impairment is conducted with respect to true & fair principle and is utilised to signal the real economic condition of the company; H2 – the practice of asset impairment reporting is a tool of earnings management. Verification of the thesis is done using various methods, divided into three stages: an introductory analysis, a long-term horizon analysis focused on the underlying economic condition of the companies examined and a short-term horizon analysis focused on market reaction to asset impairment reporting. Empirical research provides evidence for the positive verification of the working hypothesis. The results are presented and compared with conclusions from related studies. The overall results show that the practice of asset impairment reporting in Poland is employed to manage earnings but is also utilised to signal the true underlying economic condition of the company.

• Details
• Contents