Nonlinear dynamics in discretionary accruals: An analysis of bank loan-loss provisions

Several studies have analyzed discretionary accruals to address earnings-smoothing behaviors in the banking industry. We argue that the characteristic link between accruals and earnings may be nonlinear, since both the incentives to manipulate income and the practical way to do so depend partially on the relative size of earnings. Given a sample of 15,268 US banks over the period 1996–2011, the main results in this paper suggest that, depending on the size of earnings, bank managers tend to engage in earnings-decreasing strategies when earnings are negative (“big-bath”), use earnings-increasing strategies when earnings are positive, and use provisions as a smoothing device when earnings are positive and substantial (“cookie-jar” accounting). This evidence, which cannot be explained by the earnings-smoothing hypothesis, is consistent with the compensation theory. Neglecting nonlinear patterns in the econometric modeling of these accruals may lead to misleading conclusions regarding the characteristic strategies used in earnings management.

Semantic change and intersubjectification: The origin of reprise evidential conditional in Old Catalan

The reprise evidential conditional (REC) is nowadays not very usual in Catalan: it is restricted to journalistic language and to some very formal genres (such as academic or legal language), it is not present in spontaneous discourse. On the one hand, it has been described among the rather new modality values of the conditional. On the other, the normative tradition tended to reject it for being a gallicism, or to describe it as an unsuitable neologism. Thanks to the extraction from text corpora, we surprisingly find this REC in Catalan from the beginning of the fourteenth century to the contemporary age, with semantic and pragmatic nuances and different evidence of grammaticalization. Due to the current interest in evidentiality, the REC has been widely studied in French, Italian and Portuguese, focusing mainly on its contemporary uses and not so intensively on the diachronic process that could explain the origin of this value. In line with this research, that we initiated studying the epistemic and evidential future in Catalan, our aim is to describe: a) the pragmatic context that could have been the initial point of the REC in the thirteenth century, before we find indisputable attestations of this use; b) the path of semantic change followed by the conditional from a ‘future in the past’ tense to the acquisition of epistemic and evidential values; and c) the role played by invited inferences, subjectification and intersubjectification in this change.