The Economic Consequences of Accounting Standard Transition in Hospitality Companies

This research centers around the accounting transition to Accounting Standards Codification Topic 606 (ASC 606) in hospitality companies and tests the transition's effect on these public hospitality companies' firm value from both long-term and short-term perspectives. The findings revealed that the accounting standard transition negatively affects firm value from a long-term view but positively affects it from a short-term view. We also found that the choice of accounting transition method matters and leads to different economic consequences for hospitality companies' firm value. Our findings have many important implications for managerial practices and regulators.