Abstract/Details

The effects of strategic bankruptcy and contingent liabilities on the performance of bankruptcy prediction models


1998 1998

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Abstract (summary)

The purpose of the study is to analyze the effects of strategic bankruptcy and contingent liabilities footnote disclosure (as required by the Statement of Financial Accounting Standards No. 5) on the performance of bankruptcy prediction models. The results of the study indicate the following: (1) Because strategic bankruptcies have been used as a business strategy to accomplish a corporate goal, when strategic bankruptcies are grouped with financial bankruptcies, noise is created. Partitioning bankrupt firms into strategic and financial bankrupt firms cleans the noise and improves the accuracy of the bankruptcy prediction models. (2) The Type I error rate and accuracy of the model improved significantly with the inclusion of contingent liability variables. A proxy for the accrual of contingent liabilities included in the financial statements is not a good discriminator of bankrupt and nonbankrupt firms. A proxy for text length of the contingent liability footnote disclosure is statistically significant and should be considered in bankruptcy prediction models.

Indexing (details)


Subject
Studies;
Contingent liabilities;
Financial statement notes;
Disclosure;
Bankruptcy;
Predictions;
Strategic planning
Classification
0272: Accounting
0508: Finance
Identifier / keyword
Social sciences; Bankruptcy; Contingent liabilities; Strategic bankruptcy
Title
The effects of strategic bankruptcy and contingent liabilities on the performance of bankruptcy prediction models
Author
Lombard, Doris Ann (Dori)
Number of pages
121
Publication year
1998
Degree date
1998
School code
0483
Source
DAI-A 59/09, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
ISBN
9780599041608, 0599041609
Advisor
El-Gazzar, Samir
University/institution
Pace University
University location
United States -- New York
Degree
D.P.S.
Source type
Dissertations & Theses
Language
English
Document type
Dissertation/Thesis
Dissertation/thesis number
9904669
ProQuest document ID
304486989
Copyright
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
http://search.proquest.com/docview/304486989
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