The Role of Non-discretionary Conservatism in Asset-Impairment Accounting －Predicting the Impact of Accounting Standards on Accounting Conservatism by using Quantile Regression －

2019・20

要約

This study aims to investigate how non-discretionary conservatism functions in Japan’s listed companies as identified through the implementation of asset impairment accounting standards. It finds that managerial opportunism cannot be completely ruled out even when asset write-downs are strongly warranted by circumstances. The findings of this study suggest that the current Japanese accounting regime for fixed assets’ impairment is likely to create an environment where management undertakes a more aggressive approach to earnings than their counterparts in the USA. In an attempt to determine the sources of the differences between Japan and the USA, evidence also shows that current accounting standards, on their own, are inadequate to produce high-quality accounting. Armed with the most-recently-developed statistical tools, quantile regression (QR) and the least absolute shrinkage selection operator (LASSO), this study also tries to characterize the mechanism by which accounting standards and/or customary accounting practice shape the realm of Japanese accounting. In turn, this study provides an opportunity to re-evaluate the unique circumstances that are propelling accounting practices in Japan.