Causes and Effects of Discretionary Asset Write-offs, Journal of Accounting Research
This paper provides evidence on the causes and shareholder wealth effects of discretionary asset write-offs. We find that both managers' incentives to manipulate earnings and economic impairment explain write-off decisions in general, however, incentives play a stronger role in the decision to write-off discretionary items such as intangibles. Investors' reactions to the write-off announcements depend on the nature of the asset being written-off because of the underlying motivation for the wirte-off.
Jennifer Francis, J.Douglas Hanna, Linda Vincent
Francis, Jennifer, J.Douglas Hanna, and Linda Vincent. 1996. Causes and Effects of Discretionary Asset Write-offs. Journal of Accounting Research. 34(Supplement): 117-134.