The Feltham‐Ohlson Framework: Implications for Empiricists *

The Feltham‐Ohlson Framework: Implications for Empiricists * Accepted by Michael Gibbins. I am grateful to Jeff Abarbanell for the data analysis reported In this paper and for his useful suggestions on its contents. Contemporary Accounting Research Vol. 11 No 2 (Spring 1995) pp 733-747 ®CAAA Contemporary Accounting Research discussed previously by Penman (1992), involves a shift in what we consider the ultimate objective of research on the relation between accounting data and firm value—that is, research bearing on fundamental anatysis. It leads us away from an emphasis on explaining stock price behavior and towards a focus on predicting future eamings and future growth in book value. The gains from this shift are ultimately an empirical issue, but evidence presented here is promising. The second contribution pertains to how we stmcture the relation between accounting data and firm value. Ohlson (1995) and Feltham and Ohtson (1995) provide an appropriate point of departure for nearly any empirical work on this relation. It is only a point of cleparture, no where near a complete stmcture, but then, getting off to the right start can be cmcial. On the appropriate objective of research on fundamental analysis Fundamental anatysis involves a study of a firm's current activities and prospects for http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Contemporary Accounting Research Wiley

The Feltham‐Ohlson Framework: Implications for Empiricists *

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Publisher
Wiley Subscription Services, Inc., A Wiley Company
Copyright
1995 Canadian Academic Accounting Association
ISSN
0823-9150
eISSN
1911-3846
D.O.I.
10.1111/j.1911-3846.1995.tb00463.x
Publisher site
See Article on Publisher Site

Abstract

Accepted by Michael Gibbins. I am grateful to Jeff Abarbanell for the data analysis reported In this paper and for his useful suggestions on its contents. Contemporary Accounting Research Vol. 11 No 2 (Spring 1995) pp 733-747 ®CAAA Contemporary Accounting Research discussed previously by Penman (1992), involves a shift in what we consider the ultimate objective of research on the relation between accounting data and firm value—that is, research bearing on fundamental anatysis. It leads us away from an emphasis on explaining stock price behavior and towards a focus on predicting future eamings and future growth in book value. The gains from this shift are ultimately an empirical issue, but evidence presented here is promising. The second contribution pertains to how we stmcture the relation between accounting data and firm value. Ohlson (1995) and Feltham and Ohtson (1995) provide an appropriate point of departure for nearly any empirical work on this relation. It is only a point of cleparture, no where near a complete stmcture, but then, getting off to the right start can be cmcial. On the appropriate objective of research on fundamental analysis Fundamental anatysis involves a study of a firm's current activities and prospects for

Journal

Contemporary Accounting ResearchWiley

Published: Mar 1, 1995

References

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