Abstract
Nonrecurring times are ambiguously defined and whether they play a role in valuation and CEO compensation is unclear. I focus on intangible-intensive firms and find convincing evidence that special items and discontinued operations contain useful information to assess the value of unrecorded intangibles. I also find weak evidence that heavy reliance on market-based compensation for intangible-intensive firms is associated with the ability of nonrecurring items to convey information about intangible related activities. My results link the valuation and compensation literature and suggest that the incentive relevance of special items and discounted operations depends upon a tradeoff between the value relevance and reliability of these items.
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