Asset redeployability and readability of annual report

Abstract

We examine the impact of holding more redeployable assets on the readability of annual reports. Building on prior research, we develop two competing hypotheses. Using a large panel sample of 67,022 firm-year observations for the period of 1993–2018, we find that the annual reports of firms with more redeployable assets are easier to read and understand. We further obtain consistent results after performing a battery of robustness and endogeneity checks. Overall, our study joins the debate on whether holding more redeployable assets is beneficial or detrimental to a company and contributes to a more comprehensive understanding of asset redeployability.