Discussion of “Comparing Alternative Hedge Accounting Standards: Shareholders' Perspective”

Discussion of “Comparing Alternative Hedge Accounting Standards: Shareholders' Perspective” 294 CHANDRA KANODIA lending policies, and whether this, in turn, would affect interest rates and real investment in the economy. Similarly, consider the recent debate on the capitalization of intangible investments. A value-relevance study, of which there have been several, would estimate intangible investments, capitalize and amortize them, and examine their value relevance by testing whether the restated earnings and book values provide a better fit with empirically observed returns in the capital market. (Since the data on security returns are drawn from a world where intangibles are not capitalized, the interpretation of such a study is problematic.) On the other hand, a real effects study would ask whether a reporting mandate to capitalize intangibles would alter firms’ incentives to invest in intangibles. This real effect could possibly arise through the pricing of intangible investments in the capital market. The question can equivalently be framed in terms of cost of capital. Is the cost of capital for intangible investments altered as a consequence of how intangibles are treated in the financial statements? Notice that the real effects perspective argues that disclosure policy alters the very dis- tribution of the cash flows about which that disclosure is seeking to provide http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Accounting Studies Springer Journals

Discussion of “Comparing Alternative Hedge Accounting Standards: Shareholders' Perspective”

Loading next page...
Kluwer Academic Publishers
Copyright © 1999 by Kluwer Academic Publishers
Business and Management; Accounting/Auditing; Corporate Finance; Public Finance
Publisher site
See Article on Publisher Site


You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.



billed annually
Start Free Trial

14-day Free Trial