Univrsity Of Tehran Press Accounting and Auditing Review 2645-8020 17 1 2010 08 23 The Effect of Life-Cycle Stages and Accounting Conservatism on Firm Valuation The Effect of Life-Cycle Stages and Accounting Conservatism on Firm Valuation 21031 FA Gholam Reza Karami 0000-0003-3101-1549 Hamed Omrani Journal Article The main aim of this paper is to investigate the joint effects of accounting conservatism and life-cycle stages on firm valuation. Using the Feltham and Ohlson [1995]’s valuation model, this study examined the effect of accounting conservatism on reactions of investors to both abnormal operating earnings and net operating assets at different life-cycle stages. first, sample firms were classified into three life-cycle stages (Growth, Mature and Decline) and two Groups (Conservative and Aggressive).Then, we used a pooled cross-sectional time-series regression models to test the hypotheses. In this study, financial information of 75 firms which were accepted at Tehran’s Stock Exchange (TSE) from 1382 to 1387 (450 firm-years) was examined. The results of this study show that investors place higher emphasis on both abnormal operating earnings and net operating assets of the firms at growth stage than the firms at mature or declining stage. Furthermore, investors place higher emphasis on both abnormal operating earnings and net operating assets of the firms which are in growth or mature stage and use conservative accounting practices than firms which use aggressive accounting practices. However, for the firms in decline stage the opposite is true. The main aim of this paper is to investigate the joint effects of accounting conservatism and life-cycle stages on firm valuation. Using the Feltham and Ohlson [1995]’s valuation model, this study examined the effect of accounting conservatism on reactions of investors to both abnormal operating earnings and net operating assets at different life-cycle stages. first, sample firms were classified into three life-cycle stages (Growth, Mature and Decline) and two Groups (Conservative and Aggressive).Then, we used a pooled cross-sectional time-series regression models to test the hypotheses. In this study, financial information of 75 firms which were accepted at Tehran’s Stock Exchange (TSE) from 1382 to 1387 (450 firm-years) was examined. The results of this study show that investors place higher emphasis on both abnormal operating earnings and net operating assets of the firms at growth stage than the firms at mature or declining stage. Furthermore, investors place higher emphasis on both abnormal operating earnings and net operating assets of the firms which are in growth or mature stage and use conservative accounting practices than firms which use aggressive accounting practices. However, for the firms in decline stage the opposite is true. https://acctgrev.ut.ac.ir/article_21031_bc7386076e4bf0bd4c58874726403e1e.pdf