Question: Why might a manager decide to take a very conservative accounting approach and book many negative items in a current period? Equity-linked compensation produces motivation

Why might a manager decide to take a very conservative accounting approach and book many negative items in a current period? Equity-linked compensation produces motivation to artificially inflate short-term performance Taking a "big bath now will make future periods' performance look favorable by comparison, Uncertainty about future accounting standards that may alow more discretion in revenue recognition

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