Time/时间：6月4日（周四）10:00-11:30

Venue/地点：Room 501, Jiageng Building 2/嘉庚二号楼501教室

Topic/题目：Fooled by the Face? Headline GAAP, Core Earnings, and Cost of Debt

Speaker/报告人：李皖昀助理教授

Content/报告内容简介：This study investigates whether lenders incorporate information about earnings quality when pricing corporate loans, focusing on the discrepancy between firms’ reported GAAP earnings and Core Earnings—a standardized measure that removes transitory and non-operating items. Using the novel New Constructs dataset, we examine whether earnings distortions (GAAP minus Core Earnings) influence loan spreads and non-price contract terms. We document a consistent and economically significant pattern: firms with inflated GAAP earnings relative to Core Earnings obtain lower loan spreads, indicating that lenders rely heavily on headline GAAP profitability rather than on the persistence and sustainability of underlying operating performance. This finding supports the prediction that common bank screening practices—built around standardized GAAP inputs—can allow non-core, non-recurring, and special items to bias perceived credit quality. The effect is concentrated among firms with strong information environments (large firms, high analyst coverage, and high institutional ownership) and remains robust to several alternative measures and matching procedures. However, in sign-flip cases, where GAAP reports a profit but Core Earnings indicate an operating loss, lenders appear to detect the underlying risk, leading to higher loan spreads. We find no evidence that distortions affect non-price loan terms. Overall, the study contributes to research on loan contracting and non-GAAP measurement by demonstrating that earnings distortion represents a meaningful information risk for lenders and highlighting the potential value of a standardized core-earnings framework for credit markets.

About the Speaker/报告人简介：李皖昀，现任厦门大学财务管理与会计研究院助理教授，博士毕业于澳大利亚国立大学商学院。其研究兴趣主要包括财务会计，大数据与数据分析，会计信息系统。