By deferring profits and anticipating losses, conservatism makes earnings increases more persistent and earnings declines more likely to revert. Therefore, the level of conservatism in current earnings has implications for future earnings expectations. Past research shows that outsiders can fail to understand these implications. This paper aims to investigate whether firms help outsiders by voluntarily disclosing their expectations about how conservatism will affect future earnings trends.,The authors examine the likelihood and content of “early” earnings guidance – i.e. guidance about future earnings that is released around or before the announcement of current earnings. The sample is made of 8,820 annual earnings announcements, 62 per cent of which are combined with early guidance.,The authors find that the more conservative current earnings, the higher: the likelihood that the firm releases early guidance; the likelihood that the firm predicts a positive change in earnings; and the difference between the forecasted earnings and current earnings. The authors also find such guidance to be relevant to analysts, who use it to update their forecasts.,By showing that firms use early guidance to disclose the effect of conservatism on future earnings, the study is interesting to users and preparers because it shows that analysts need and use such disclosure; and regulators because it alleviates concerns about the information consequences of conservatism.,The findings show that firms do not refrain from committing to positive early guidance to disclose the earnings effects of conservatism. This is interesting in light of the difficulty of predicting such effects, the manager incentives to keep expectations low and the cost of committing to positive guidance instead of less risky qualitative disclosure alternatives. In this way, the authors contribute to the literature on the interrelation between voluntary disclosure and conservatism in financial reports.

中文翻译：

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公司是否使用早期指导来披露保守主义对未来收益的影响？

通过递延利润和预期亏损，保守主义使收益增长更加持久，收益下降更有可能恢复。因此，当前收益的保守程度对未来收益预期有影响。过去的研究表明，局外人可能无法理解这些含义。本文旨在调查企业是否通过自愿披露保守主义将如何影响未来收益趋势的期望来帮助局外人。作者研究“早期”收益指南的可能性和内容，即早期收益指导在发行前后或之后发布。公布当前收益。该示例由8820个年度收益公告组成，其中62％与早期指导相结合。作者发现，当前收益较为保守，较高：公司发布早期指导的可能性；公司预测收益出现积极变化的可能性；以及预测收益与当前收益之间的差额。作者还发现这样的指南与分析师有关，后者使用它来更新他们的预测。通过显示公司使用早期指南来揭示保守主义对未来收益的影响，该研究对用户和准备者都很有趣，因为它表明分析人员需要并使用此类披露；研究结果表明，企业并没有做出积极的早期指导来披露保守主义的收益影响，而是放松了对保守主义的信息后果的担忧。鉴于很难预测此类影响，因此这很有趣，经理们鼓励降低期望值，并采取积极的指导方针，而不是降低风险的定性信息披露方案。这样，作者就有关财务报告中自愿披露与保守主义之间相互关系的文献做出了贡献。