Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/147629
Title: A COMPREHENSIVE STUDY ON ASSET WRITE-OFFS IN SINGAPORE LISTED COMPANIES
Authors: STEFFI LAU YING TING
Issue Date: 2012
Citation: STEFFI LAU YING TING (2012). A COMPREHENSIVE STUDY ON ASSET WRITE-OFFS IN SINGAPORE LISTED COMPANIES. ScholarBank@NUS Repository.
Abstract: This paper analyzes the asset write-offs of firms listed on the Singapore Exchange. I find that intangible asset write-offs are less reliable than tangible asset write-offs as there is no evidence that the former is associated with future earnings, while tangible asset write-offs are positively correlated with future earnings. Tests of value relevance report results consistent with securities market efficiency. Investors realize the reduced reliability of intangible asset write-offs and accordingly react more strongly to tangible asset write-offs than intangible asset write-offs. However, there is evidence of mispricing for the write-offs of assets held under the revaluation and fair value model, suggesting that the Singapore market is not fully efficient. Lastly, I find indications of income smoothing behavior by managers. The results show that managers tend to write-off assets in years of good firm performance, when they have the buffer to build an allowance to boost earnings in the future. Also, managers are likely to write-off assets with reversible write-offs instead of goodwill, due to the irreversibility of goodwill write-offs. In combination, this provides indirect evidence that managers use asset write-offs reversals to conduct earnings management through income smoothing.
URI: http://scholarbank.nus.edu.sg/handle/10635/147629
Appears in Collections:Bachelor's Theses (Restricted)

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