Redovisningskonservatism -En studie om redovisningens försiktighet i Sverige

Abstract

This study aims to measure the effect of accounting conservatism and to identify the business activities causing firms to undervalue owners’ equity. To estimate accounting conservatism, we have followed the hypothesis that no firm over time can generate a return greater than its cost of equity, i.e. CAPM. Thus, if a firm in fact generates an excess return over time, we assume that the excess return is an estimate of accounting conservatism within that firm. The hypothesis originates from the corporate valuation model “Economic Value Added®” which tries to adjust for accounting bias. The model assumes that excess return generated by a firm is due to business goodwill, but over time the business goodwill is said to fade away, and the remaining excess return will be a constant accounting bias. When testing the hypothesis on all of the thirty firms included in the Stockholm stock exchange (OMXS30), we find that there is a measurable accounting bias caused by heavy investment activities in intangible assets. We conclude that the accounting practices for intangibles are outdated; as today’s practices lets you capitalize only on a few of these investment expenditures, thus causing mismatching of costs and revenues. Keywords: Accounting conservatism Accounting bias Accounting relevance Excess return Return on equity Cost of equity Economic Value Added®