The relative information content of operating and financing cash flow in the proposed cash flow statement |
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Authors: | Rick N. Francis |
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Affiliation: | Accounting Department, University of Texas at El Paso, Business Administration Building, 500 W. University Avenue, El Paso, TX 79968‐0542, USA |
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Abstract: | This study compares the relative information content of the new specifications of operating and financing cash flow as proposed jointly by the IASB and the FASB with the specifications in SFAS No. 95. A unique feature of the study is the use of the Siegel and Biddle (1994) test of relative information content. The results indicate that the proposed operating cash flow measure has less relative information content than the current measure, and the results for financing cash flow are consistent with equity investors finding no significant difference between the current and proposed measures. |
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Keywords: | Relative information content Cash flow Non‐nested models C52 M41 |
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