A Theory of Principles-Based Classification

dc.contributor.author	Konvalinka, Matjaž
dc.contributor.author	Penno, Mark
dc.contributor.author	Stecher, Jack
dc.date.accessioned	2020-12-01T01:02:04Z
dc.date.available	2020-12-01T01:02:04Z
dc.date.issued	2020-08-18
dc.description.abstract	We study a firm's decision to classify transactions as recurring or nonrecurring in a setting with no fixed classification scheme, but with the following principle: recurring transactions must be more persistent than nonrecurring ones. Under this principle, equilibrium firm behavior provides a new explanation for the observed relationship between income and classifications. Moreover, we find that market prices are more informative under principles-based classifications than they would be under a hypothetical, optimally chosen specific classification rule
dc.identifier.uri	http://hdl.handle.net/10125/70556
dc.subject	Classification Shifting
dc.subject	Earnings Management
dc.subject	Principles
dc.subject	Rules
dc.subject	Signaling
dc.title	A Theory of Principles-Based Classification

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