Purpose

The purpose of this paper is to identify the application of the fundamental principle of accounting conservatism within the EU food and drink industry. Furthermore, the authors would also investigate in-depth the above relationship in two different subsamples (income smoothers and non-income smoothers).

Design/methodology/approach

All EU-listed companies of the food and drink industry were identified covering the year 2019. Eckel's model was used to classify listed companies as smoothing or non-smoothing, and Basu's model was adopted to test the degree of conditional conservatism.

Findings

The results indicate that conservatism is strongly present in food and drink industry and also in its subindustries. We also showed that non-smoothing firms had higher levels of conditional conservatism in terms of more opportunity to recognize future economic losses because the market could use the stock return data to anticipate future losses contained in the information regarding profits.

Research limitations/implications

One limitation of this work is the small size of the investigated companies. The authors demonstrate that the likely increased use of conservatism produces better credibility in the EU markets. Practical implications indicate a higher degree of monitoring of the accounting practices adopted by firms. Regulators have to set accounting policies to enhance the quality of the informational environment, investors and shareholders might exercise control over executives' decisions, and lenders might impose contractual clauses requiring the timely disclosure of “bad news.”

Originality/value

This industry is “belted” from any external speculations. This research made it possible also to observe theoretical relationships between the financial information provided by the EU food and drink industry that contributes to the market distinction between smoothers and non-smoothers.

中文翻译：

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欧盟食品和饮料行业的会计保守主义和收入平滑做法

目的

本文的目的是确定会计稳健性基本原则在欧盟食品和饮料行业的应用。此外，作者还将在两个不同的子样本（收入平滑器和非收入平滑器）中深入研究上述关系。

设计/方法/方法

确定了2019年食品饮料行业所有欧盟上市公司，采用Eckel模型对上市公司进行平滑或非平滑分类，采用Basu模型检验条件保守性程度。

发现

结果表明，保守主义在食品和饮料行业及其子行业中普遍存在。我们还表明，就更多机会确认未来经济损失而言，非平滑公司具有更高水平的条件保守主义，因为市场可以使用股票收益数据来预测利润信息中包含的未来损失。

研究限制/影响

这项工作的一个限制是被调查公司的规模较小。作者证明，可能更多地使用保守主义会在欧盟市场产生更好的可信度。实际意义表明对公司采用的会计实践进行了更高程度的监控。监管机构必须制定会计政策以提高信息环境的质量，投资者和股东可能会控制高管的决策，贷款人可能会施加要求及时披露“坏消息”的合同条款。

原创性/价值

这个行业不受任何外部猜测的影响。这项研究还使得观察欧盟食品和饮料行业提供的财务信息之间的理论关系成为可能，这些信息有助于区分平滑剂和非平滑剂的市场。