The importance of accounting changes in debt contracts: the cost of flexibility in covenant calculations

By Anne L. Beatty, K. Ramesh, Joseph P. Weber. 2002

268 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/f88fbc494dea696860171470f1d05a0d8cdddb52

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. K. Ramanna
2. W. Guay
3. Christopher S. Armstrong
4. Douglas J. Skinner
5. S. Kothari
6. Joseph P. Weber
7. M. Paananen
8. J. Novak

In Economics and Econometrics

1. K. Ramanna
2. W. Guay
3. Joseph P. Weber
4. Douglas J. Skinner
5. Christopher S. Armstrong
6. S. Kothari
7. Söhnke M. Bartram
8. Martin Walker

In Finance

1. Douglas J. Skinner
2. Christopher S. Armstrong
3. S. Kothari
4. W. Guay
5. K. Ramanna
6. M. Paananen
7. Joseph P. Weber
8. Robert M. Bushman

Citations in the corpus

• The Implications of Unverifiable Fair-Value Accounting: Evidence from the Political Economy of Goodwill Accounting (2008, unknown): “16 In a sample of 206 firms, Beatty et al. (2002) find that about 25% have covenants that include the effects of mandatory accounting changes in calculations.”
• The Contracting Benefits of Accounting Conservatism to Lenders and Borrowers (2008, unknown): “An example of such commitment is the use of fixed GAAP in the covenants (Mohrman, 1996; Beatty, Ramesh, and Weber, 2002).”
• Impact of proximity to debt covenant violation on earnings management (2013, unknown): “However, many private debt contracts constrain the use of such changes (Mohrman 1996; Beatty et al. 2002).”
• Accounting Information in Financial Contracting: The Incomplete Contract Theory Perspective (2016, unknown): “…contractual provisions (e.g., Leftwich, 1983), (ii) the significant effect of accounting information properties on debt contract design (e.g., Beatty, Ramesh, and Weber, 2002, Ball, Bushman, and Vasvari, 2008, and Zhang 2008), (iii) the influence debt contracts have on accounting choice…”
• The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting (2010, background): “For example, Bharath et al. (2008) investigate the relationship between accounting quality and the maturity and security requirements included in private and public debt contracts. They find that in private debt contracts, firms with higher quality accounting are able to negotiate a longer maturity ”