Abstract
The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 52 "Foreign Currency Translation" in December 1981 to replace SFAS No. 8 "Accounting for the Translation of Foreign Currency Transactions and Foreign Currency Financial Statements." SFAS No. 52 provided companies with two opportunities to comply early with the standard or to continue to use SFAS No. 8 until the mandatory implementation date of December 15, 1982. The research reported in this dissertation examined the characteristics of early adopting firms and late adopting firms to identify factors that explained why some firms adopted the new standard early and why some firms deferred adoption of the new standard. The research in this dissertation also examined stock price return behavior to see if there was a reaction to early adoption of a new accounting standard. Firm size, magnitude of foreign operations, and debt/equity ratios were the three factors that exhibited consistent behavior for the two periods of early compliance. Firms that were larger, had higher magnitude of foreign operations, and higher debt/equity ratios deferred adoption of SFAS No. 52. Other factors that were hypothesized to be important in explaining firm behavior did not yield consistent results for the two periods of early adoption. Results indicated that there was no stock market reaction associated with early adoption or deferred adoption of SFAS No. 52. Adoption of SFAS No. 52 did not convey new information to the market.
Berg, Gary Gene (1987). Early versus late compliance to SFAS 52 : an empirical investigation of firm characteristics and the market response. Texas A&M University. Texas A&M University. Libraries. Available electronically from
https : / /hdl .handle .net /1969 .1 /DISSERTATIONS -26865.