Determinants and Consequences of Firms' Derivative Accounting Decisions
研究了企业使用对冲会计的决定因素及其对财务报告和资本市场的影响，发现合规成本影响决策，对冲会计降低了报告盈余波动性，但未降低投资者评估的企业风险。
ABSTRACT Financial accounting standards require derivatives to be recognized at fair value with changes in value recognized immediately in earnings. However, if specified criteria are met, firms may use an alternative accounting treatment, hedge accounting, which is intended to better represent the underlying economics of firms' derivative use. Using FAS 161 disclosures, I examine determinants of hedge accounting use and the effects of hedge accounting on financial reporting and capital markets. I find variation in firms' hedge accounting use and provide evidence that compliance costs of applying hedge accounting affect firms' decision to use hedge accounting. Firms decrease their reported earnings volatility via derivatives that receive hedge accounting and could further decrease their earnings volatility if hedge accounting were applied to all their derivatives. Inconsistent with arguments given for using hedge accounting, I fail to find a decrease in investors' assessments of firm risk from using hedge accounting. JEL Classifications: M40; M41; G32.