Evidence of the Impact of Reported Discontinued Operations on Credit Ratings

摘要

We investigate the impact of accounting for discontinued operations on credit ratings under two regimes, APB No. 30 and SFAS No. 144. We find that under APB No. 30 and SFAS No. 144, the relationship between reported discontinued operations and credit ratings was negative for firms reporting a gain from discontinued operations. Separately stated gains of discontinued operations appear to have persistence in both periods, pre-SFAS 144 and SFAS 144. Reported losses from discontinued operations was not associated with the credit rating and therefore appear to have little or no persistence.