Inflation and Nominal Financial Reporting: Implications for Performance and Stock Prices

This study investigates nominal financial reporting and its implications for firm's performance and stock prices under inflationary condition. To do so, the correlation between unrecognized inflation gains or losses as independent variable and future operating cash flows, future cash flows from...

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Autores principales:	Vida Mojtahed Zadeh, Dornaz Neitas
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2011
Materias:	nominal financial reporting inflation unrecognized inflation gains or losses abnormal return Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/4b94f41122354d778866d372940b8bf0
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spelling	oai:doaj.org-article:4b94f41122354d778866d372940b8bf02021-11-04T19:41:46ZInflation and Nominal Financial Reporting: Implications for Performance and Stock Prices2008-89142476-292X10.22103/jak.2011.11https://doaj.org/article/4b94f41122354d778866d372940b8bf02011-09-01T00:00:00Zhttps://jak.uk.ac.ir/article_11_2aeda5bbb5254ff1b36df72beea7a307.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XThis study investigates nominal financial reporting and its implications for firm's performance and stock prices under inflationary condition. To do so, the correlation between unrecognized inflation gains or losses as independent variable and future operating cash flows, future cash flows from sale of assets and abnormal returns on portfolios constructed on unrecognized inflation gains or losses as dependent variables was examined. Independent variable was calculated by inflation adjustment algorithm (Konchitchki, 2009). To investigate the relationship between independent and dependent variables Barth, Cram, and Nelson (2001), Konchitchki (2009), and Fama and French (1993) models were used. Pearson statistical analysis was applied to test the hypotheses. Using data for 98 listed companies on Tehran Stock Exchange from March 2000 to February 2009, the results shows the higher unrecognized inflation gains or losses of a firm, the lower future operating cash flows is expected. Moreover, such firms tend to sell their fix assets and have lower stock returns in future.Vida Mojtahed ZadehDornaz NeitasShahid Bahonar University of Kermanarticlenominal financial reportinginflationunrecognized inflation gains or lossesabnormal returnAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 2, Iss 7, Pp 27-46 (2011)
institution	DOAJ
collection	DOAJ
language	FA
topic	nominal financial reporting inflation unrecognized inflation gains or losses abnormal return Accounting. Bookkeeping HF5601-5689
spellingShingle	nominal financial reporting inflation unrecognized inflation gains or losses abnormal return Accounting. Bookkeeping HF5601-5689 Vida Mojtahed Zadeh Dornaz Neitas Inflation and Nominal Financial Reporting: Implications for Performance and Stock Prices
description	This study investigates nominal financial reporting and its implications for firm's performance and stock prices under inflationary condition. To do so, the correlation between unrecognized inflation gains or losses as independent variable and future operating cash flows, future cash flows from sale of assets and abnormal returns on portfolios constructed on unrecognized inflation gains or losses as dependent variables was examined. Independent variable was calculated by inflation adjustment algorithm (Konchitchki, 2009). To investigate the relationship between independent and dependent variables Barth, Cram, and Nelson (2001), Konchitchki (2009), and Fama and French (1993) models were used. Pearson statistical analysis was applied to test the hypotheses. Using data for 98 listed companies on Tehran Stock Exchange from March 2000 to February 2009, the results shows the higher unrecognized inflation gains or losses of a firm, the lower future operating cash flows is expected. Moreover, such firms tend to sell their fix assets and have lower stock returns in future.
format	article
author	Vida Mojtahed Zadeh Dornaz Neitas
author_facet	Vida Mojtahed Zadeh Dornaz Neitas
author_sort	Vida Mojtahed Zadeh
title	Inflation and Nominal Financial Reporting: Implications for Performance and Stock Prices
title_short	Inflation and Nominal Financial Reporting: Implications for Performance and Stock Prices
title_full	Inflation and Nominal Financial Reporting: Implications for Performance and Stock Prices
title_fullStr	Inflation and Nominal Financial Reporting: Implications for Performance and Stock Prices
title_full_unstemmed	Inflation and Nominal Financial Reporting: Implications for Performance and Stock Prices
title_sort	inflation and nominal financial reporting: implications for performance and stock prices
publisher	Shahid Bahonar University of Kerman
publishDate	2011
url	https://doaj.org/article/4b94f41122354d778866d372940b8bf0
work_keys_str_mv	AT vidamojtahedzadeh inflationandnominalfinancialreportingimplicationsforperformanceandstockprices AT dornazneitas inflationandnominalfinancialreportingimplicationsforperformanceandstockprices
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Inflation and Nominal Financial Reporting: Implications for Performance and Stock Prices

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