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The paper develops a concept of transitory earnings and contrasts this source of earnings to “core” (or recurring) earnings. It is shown that any two of the following three attributes of transitory earnings imply the third: (i) forecasting irrelevance with respect to next-period aggregate earnings, (ii) value irrelevance, and (iii) unpredictability. The paper makes the case that the ...
- Springer
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- On Transitory Earnings - Springer
On Transitory Earnings. JAMES A. OHLSON...
- Springer
On Transitory Earnings. JAMES A. OHLSON johlson@stern.nyu.edu. New York University, Leonard N. Stern School of Business, 40 West 4th Street, New York, NY 10012. Abstract. The paper develops a concept of transitory earnings and contrasts this source of earnings to “core” (or recurring) earnings. It is shown that any two of the following ...
- James Arvid Ohlson
- 1999
Answer and Explanation: 1. Become a Study.com member to unlock this answer! Create your account. View this answer. Transitory Earnings is defined as the temporary income, which means the income for which the source is not fixed and not even consistent.
Distinguishing between the recurring and transitory components of earnings is a crucial task in financial analysis. The expected future earnings of a firm are the key driver of its value, and the recurring component of current earnings is the usual starting point for forecasting future earnings.
Nov 20, 2020 · earnings (e.g., income-increasing or income-decreasing); and (iii) economic category (e.g., acquisition- or restructuring-related). To measure core earnings, we exclude from GAAP earnings the items NC deems to have resulted from transitory shocks or ancillary business activities. Speci cally, our measure
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Jul 1, 2008 · A better way to understand TRS. Sadly, most traditional ways of understanding TRS are flawed. Many of them, for example, define TRS as the sum of the percentage change in earnings plus the percentage change in market expectations—as measured by the price-earnings ratio (P/E)—plus the dividend yield. This simplistically connects TRS with ...
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Aug 23, 2013 · Non-generally accepted accounting principles (non-GAAP) earnings reporting has been linked with both informative and strategic incentives. We seek to disentangle these conflicting effects by examining the association between non-GAAP earnings disclosure and transitory items in GAAP earnings, conditional on managers' reporting incentives.
