The effect of tangible fixed assets and long-term investments in the quality of earnings
Subject Areas :
محسن Dastgir
1
(
استاد حسابداری و مدیریت مالی دانشگاه شهید چمران اهواز
)
بهرام GHanizadeh
2
(
کارشناس ارشد، گروه آموزشی حسابداری ، واحد نجف آباد، دانشگاه آزاد اسلامی، نجف آباد، ایران،
)
Keywords:
Abstract :
Due to the financial crises of the twentieth and the twenty-first centuries, investors have largely lost their trust in earning and its quality seeing their own capital or that of others being lost. Therefore, it seems necessary to measure earnings quality. The findings of a lot of accounting studies suggest that despite multiple criteria in performance evaluation, corporate managers and investors in their investment decisions use earning more widely in the optimal allocation of resources in investments. Thus, in addition to the quantity of earnings, the quality should also be noted and examined more carefully. Tangible fixed assets and long term investments are the key elements of financial reporting which represent the financial condition of the business unit. They play an important role in carrying out operational activities and, ultimately, profitability of the firms. Operational activities are not possible without them. This study evaluates the impact of earnings quality on the amount of investment in fixed assets and long term investments. The population is 415 and the ed sample is 123 firms among the listed companies in Tehran Stock Exchange for the period of 2002 to 2012. In order to measure the earnings quality, Chen model in 2005 is used which is one of the best models in the world. The research results indicate that a decrease in the earnings quality has negative correlation With Tangible fixed assets, long-term investments, and the whole company assets, and with reducing the quality of earnings, the above mentioned investments increase.