Discussion of “Are voluntary disclosures that disavow the reliability of mandated fair value information informative or opportunistic?”
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discussion_BFJL_9_8_11.pdf
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486cba3694dce4690f454cf0cc10f9c4
Author(s)
Core, John E.
Date Issued
October 2011
Journal
Journal of Accounting and Economics
Publisher
Elsevier
Citation
Core, John E. “Discussion of ‘Are Voluntary Disclosures That Disavow the Reliability of Mandated Fair Value Information Informative or Opportunistic?’” Journal of Accounting and Economics 52, no. 2–3 (November 2011): 252–258. © 2011 Elsevier B.V.
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Author's final manuscript
Abstract
Blacconiere, Frederickson, Johnson, and Lewis identify an interesting disclosure and add to our understanding of firm disclosure of option expense. The disclosure is more nuanced than is suggested by the term “disavowal”. Some disclosures are weak, almost tautological “not necessarily … reliable” statements, whereas others are straightforward statements about the “subjective nature” of the inputs to the option valuation model. The “not necessarily … reliable” language largely disappears after SFAS 123R, while stronger language persists. A striking finding in BFJL is lack of opportunism in disavowals, but I suggest that it is preliminary to conclude that there is no opportunism.
MIT Department
Sloan School of Management
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Creative Commons Attribution-NonCommercial-NoDerivs License
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DOI of Published Version
https://doi.org/10.1016/j.jacceco.2011.09.003
