The Effect of Exploration Intensity on Analysts' Forecasts

This study examines the relations between the intensity of reported exploration activity by mining and exploration companies and analysts’ private information search activities and their forecast accuracy. Under Australian accounting standards, firms can either record exploration expenditure as an expense as it is incurred, or as an exploration asset (i.e., exploration expenditure is capitalised). The accounting choice for exploration expenditure could have potential impact on analysts’ forecasts. It also examines the relations under the different accounting treatment for exploration expenditure.2 page(s