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.

Efficient split eld FDTD analysis of third-order nonlinear materials in two-dimensionally periodic media

In this work the split-field finite-difference time-domain method (SF-FDTD) has been extended for the analysis of two-dimensionally periodic structures with third-order nonlinear media. The accuracy of the method is verified by comparisons with the nonlinear Fourier Modal Method (FMM). Once the formalism has been validated, examples of one- and two-dimensional nonlinear gratings are analysed. Regarding the 2D case, the shifting in resonant waveguides is corroborated. Here, not only the scalar Kerr effect is considered, the tensorial nature of the third-order nonlinear susceptibility is also included. The consideration of nonlinear materials in this kind of devices permits to design tunable devices such as variable band filters. However, the third-order nonlinear susceptibility is usually small and high intensities are needed in order to trigger the nonlinear effect. Here, a one-dimensional CBG is analysed in both linear and nonlinear regime and the shifting of the resonance peaks in both TE and TM are achieved numerically. The application of a numerical method based on the finite- difference time-domain method permits to analyse this issue from the time domain, thus bistability curves are also computed by means of the numerical method. These curves show how the nonlinear effect modifies the properties of the structure as a function of variable input pump field. When taking the nonlinear behaviour into account, the estimation of the electric field components becomes more challenging. In this paper, we present a set of acceleration strategies based on parallel software and hardware solutions.