Prior research finds that managers engage in inventory overproduction to inflate current earnings despite the fact that overproduction is associated with significant economic costs. Additionally, Statement of Financial Accounting Standards No. 151 (SFAS 151) limited the fixed costs that can be capitalized to inventory in periods of low production, thereby introducing a penalty for underproduction by requiring firms to expense unallocated overhead in the current period. Because periods of underproduction often follow periods of overproduction, and because SFAS 151's emphasis on the subjective determination of normal capacity can erroneously categorize overproducing firms as underproducers in subsequent years, we posit that SFAS 151 makes overproduction less desirable than before. Therefore, we posit that management's propensity to use overproduction to meet earnings benchmarks should decrease after the adoption of SFAS 151. Consistent with expectations, we find a lower propensity to use overproduction to meet benchmarks following SFAS 151. These results challenge the view that SFAS 151 inadvertently encouraged overproduction.

先前的研究发现，尽管生产过剩与显着的经济成本有关，但管理者仍会通过库存过剩生产来夸大当前收益。此外，第 151 号财务会计准则声明 (SFAS 151) 限制了在低产量期间可以资本化为存货的固定成本，从而通过要求公司在当期支出未分配的间接费用来对生产不足进行处罚。由于生产不足时期通常紧随生产过剩时期，而且由于 SFAS 151 对正常产能的主观确定的强调可能会在随后几年错误地将生产过剩的公司归类为生产不足的企业，我们假设 SFAS 151 使生产过剩不如以前那么可取。因此，我们假设管理层'