Asset Write-Offs—Managerial Incentives and Macroeconomic Factors

Authors: Loh, Alfred Lye Chye; Tan, Tin Hoe

Source: Abacus, Volume 38, Number 1, February 2002 , pp. 134-151(18)

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Abstract:

The objective of this study is to explain what firm-specific and macroeconomic factors are likely to influence the asset write-off decision in Singapore, where upward revaluations, unlike in the U.S., are also permitted. The focus is on write-offs relating to two main asset categories, namely, fixed assets and long-term investments. Data on seventy-eight firms listed on the Stock Exchange of Singapore Mainboard were collected from 1983 to 1997. Results of cross-sectional and time-series analyses identify relevant macroeconomic factors to be unemployment rate, GDP growth rate and occupancy rate of properties, and firm-specific factors to be profitability and a change of board chairman.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/1467-6281.00101

Affiliations: 1: Department of Finance and Accounting, National University of Singapore

Publication date: 2002-02-01