Authors : Khadije Rabie and Zeinab Bozorgpour
Abstract: Demand for conservative reporting indicated the claim that timely identification of unrealized losses is useful for the users of financial reports. Optimistic view of the company’s managers and owners are likely to be reflected in the financial statements. As a result, the pessimism in accounting is necessary for optimistic look to be neutral. Existence of timely identification of unrealized losses procedure in financial reporting responds to a request for modification of data in order to solve these issues. The overall goal of this research is to explain the relationship between timely identification of unrealized losses and financial flexibility of companies listed in Tehran Stock Exchange. Altogether, the recent study focuses on the beneficial and positive aspects of conservatism and it is argued that accounting conservatism may improve financial flexibility. The statistical samples of the research include 95 companies listed in Tehran Stock Exchange whose data has been collected and analyzed from 2010-2014. Generally, the results showed that companies with more conservatism reserves less cash and also are more successful financing through debt and external debt. However, there was not significant relationship between dividend and accounting conservatism.
Khadije Rabie and Zeinab Bozorgpour, 2016. The Impact of Timely Identification of Unrealized Losses on Firms Financial Flexibility. International Business Management, 10: 1455-1460.