Advanced Search
MyIDEAS: Login to save this article or follow this journal

Performance measures quality and value relevance in flow-through organisational structures: the case of Canadian income trusts

Contents:

Author Info

  • Pascale Lapointe-Antunes
  • Denis Cormier
  • Michel Magnan

Abstract

Income trusts are rapidly emerging as a key force in Canadian capital markets and their unit market capitalisation exceeded 300 billion Canadian dollars by early 2008. One of the peculiarities of income trusts is that GAAP-derived measures, such as earnings, are replaced by non-GAAP measures, such as distributable income, as performance benchmarks. Hence, the need to pay investors a stable distribution motivates income trust managers to engage in distribution-based earnings management. Two research questions are addressed. Firstly, do income trusts use discretionary accruals to smooth EBITDA and, presumably, cash distributions to unit-holders? Secondly, do investors see through EBITDA smoothing? Our findings document that the EBITDA target deviation influences an income trust's accruals behaviour. Consistent with prior studies in dividend-focused environments, our results also suggest that investors may value positively discretionary accruals if they allow income trusts to maintain their cash distributions.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.inderscience.com/link.php?id=17454
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Accounting, Auditing and Performance Evaluation.

Volume (Year): 4 (2007)
Issue (Month): 6 ()
Pages: 547-571

as in new window
Handle: RePEc:ids:ijaape:v:4:y:2007:i:6:p:547-571

Contact details of provider:
Web page: http://www.inderscience.com/browse/index.php?journalID=41

Related research

Keywords: cash distributions; earnings management; income smoothing; income trusts; non-GAAP measures; performance measures; quality; value relevance; organisational structure; Canada; capital markets; discretionary accruals.;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ids:ijaape:v:4:y:2007:i:6:p:547-571. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Graham Langley).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.