Does future tense help keep goodwill alive?

When a verb refers to the future, some languages require explicit marking of that fact. A recent paper presents evidence that companies in countries using those languages are slow in reporting goodwill as impaired. The paper suggests that this is because speakers of those languages perceive the future as more distant than speakers of other languages do.

The paper is The Effect of Time Orientation in Languages on the Recognition of Goodwill Impairment Losses, by Ahmad Alshehabi, Hussein Halabi, Godfred Afrifa, in The International Journal of Accounting (2023), online ready at https://doi.org/10.1142/S1094406023500117

This post looks at:

  • how languages mark verbs as future
  • the evidence the authors found
  • how the authors explain their findings
  • my comments on the explanations
  • finding ‘abnormal’ impairment losses
  • economic significance

The authors’ list of references includes useful references on 4 topics, among others: language; culture; discounting effects of future events; and accounting. To provide a resource for future work, I have copied their references on those 4 topics into the appendix to this post.

I have posted a condensed version of this post on my language blog Language Miscellany at Future tense and psychological distance – Language Miscellany.

How languages mark verbs as future

The authors adopt a classification of languages—made originally by Chen (2013)—into 2 groups:

  • Strong-FTR languages’, such as French or English. These languages mark verbs explicitly to show when the verb refers to an event in the future. For example, French marks verbs as future by attaching an inflectional ending to a future stem: sera (‘will be’) versus est (‘is’). Here, ser- is the future stem of the verb être (‘be’) and –a is the 3rd person singular future suffix; est is the verb’s 3rd person singular present form. And English marks verbs as future by inserting before the infinitive a modal verb or auxiliary verb: for instance, will be or is going to be, contrasting with present tense is.
  • Weak-FTR languages’. Some weak-FTR languages (eg Mandarin and Finnish) have no means of marking a verb as future.  Other weak-FTR languages have such means but often do not use them (eg German).

The acronym FTR stands for future time reference.

Weak-FTR languages can still mark the future

Even though weak-FTR languages do not mark verbs as referring to the future, speakers of those languages can distinguish the future from the present—for example, by including adverbials such as ‘next year’. But those languages do not compel speakers to decide, every time they speak, whether  a verb is to be marked as future.

The distinction between weak-FTR and strong-FTR languages illustrates a well-known comment by the linguist Roman Jakobson: ‘Languages differ essentially in what they must convey and not in what they may convey’.

Which languages are in which category?

For the countries tested in Alshehabi, Halabi and Afrifa (2023), Table 1 shows whether the language(s) spoken there are strong-FTR or weak-FTR.

Strong-FTRWeak-FTR
AustraliaAustria
FranceBelgium
GreeceDenmark
IrelandFinland
IsraelGermany
ItalyHong Kong
New ZealandNetherlands
PolandNorway
PortugalSweden
South Africa 
Spain 
United Kingdom 
Table 1.  Countries tested by Alshehabi, Halabi and Afrifa (2023).

In Table 5 of an online appendix, Chen (2013) lists many more languages, classifying them all as strong-FTR or weak-FTR. Interestingly, that table 5 classifies European Portuguese as strong-FTR and Brazilian Portuguese as weak-FTR. https://assets.aeaweb.org/asset-server/articles-attachments/aer/data/april2013/20111628_app.pdf

Binary split or continuum?

Most of the authors’ analysis uses Chen’s binary split between weak-FTR and strong-FTR languages. In reality, languages sit on a spectrum, with no clear boundary between the 2 classes. So, the authors also carried out tests using 2 continuous measures of FTR developed by Chen (2013). 

Those measures were a verb ratio and a sentence ratio. These ratios show how often grammatical marking of the future occurred in weather forecasts retrieved from the internet. The authors report that these tests produced results similar to the results of their main tests using the binary split.

The use of weather forecasts as texts used in developing the 2 continuous measures of FTR is interesting. Weather forecasts are one context where some weak-FTR languages do not mark verbs as future even if they mark verbs as future in some other contexts.

Chen (2013) defines weak-FTR languages as languages not requiring the obligatory use of grammaticalized future-time reference in (main clause) prediction-based contexts. In this definition, a prediction is a statement about the future with no intentional component: a canonical example is predicting the weather. Chen took his definition from Dahl (2000), though Dahl labelled that category as ‘futureless’ languages.

Previous research on future time reference

The authors say that previous research suggests speakers of weak-FTR languages are more likely (than speakers of strong-FTR languages) to behave in a way oriented toward the future. They:

  • are more physically active, smoke less and are less likely to be medically obese.
  • save more, and hold more cash as a precaution.
  • are more future-oriented, and are more willing to accept short-term costs in return for long-term rewards, for example, investing more in research and development, protecting the environment, sustainability and social responsibility.
  • avoid decisions with negative future consequences—because these consequences seem more imminent.
  • are less likely to engage in tax avoidance.

Alshehabi, Halabi and Afrifa (2023) say there has been little previous research on how language affects corporate financial reporting. They report that:

  • Kim et al (2017) concluded that speakers of Strong-FTR languages are more likely to manage reported corporate earnings.
  • Gotti et al (2021) dispute that conclusion, arguing that the findings reported by Kim et al (2017) disappeared after further analysis that looked not just at individual languages but also at language families (eg Indo-European).

How does the psychological mechanism work?

This paper, like some of the previous research cited, finds some evidence of an association between some observable behaviour and whether a speaker’s language routinely requires the speaker to explicitly mark verbs that refer to future events. Those papers speculate that the future is psychologically more distant for speakers of strong-FTR languages than for speakers of weak-FTR languages.

I haven’t read all the underlying papers, but I have seen nothing confirming that apparently speculative explanation:

  • I agree that having to mark each verb explicitly as future (or not) might make speakers more conscious of the distinction between future and present.
  • On the other hand, having to mark that distinction every single time might just as well make the distinction less salient, through constant repetition (just as we learn to tune out background noise).

I have no information to tell me which of those plausible mechanisms is more likely to operate.     

The evidence found by the authors

The authors found evidence that companies in countries with weak-FTR languages:

  • were more likely to recognise goodwill impairment losses than in countries with strong-FTR languages.
  • recognised larger goodwill impairment losses.
  • were more likely to recognise goodwill impairment losses whose amount was ‘normal’ or ‘expected’. The measures of ‘normal’ and ‘expected’ losses were functions only of economic and accounting variables selected by the authors.

How the authors explain their findings

The crucial components of the authors’ explanation are the following:

  • impairment decisions (decisions on whether to recognise an impairment loss, and about how much the recognised impairment loss should be) are—in the view of the authors and other researchers—discretionary.
  • in making those impairment decisions, managers consider the costs that recognising an impairment loss would (or may) trigger.
  • speakers of strong-FTR languages perceive the future as more distant from the present than speakers of weak-FTR languages do.
  • because of that perception, managers who speak a strong-FTR language discount more heavily the future costs that will result from recognising an impairment loss. So, those managers have more motive for delaying the recognition of impairment losses. That motivation makes them more likely to delay recognition.

Some other implicit assumptions

I believe some other assumptions are also implicit in the authors’ chain of reasoning, though they do not mention them:

  • if an impairment loss exists, managers cannot defer its recognition for ever. At some point they will have to recognise the loss. So, managers’ decision is about when to recognise the loss, not whether to recognise it at all.
    (If managers could delay recognition for ever, even speakers of weak-FTR languages might do that.)
  • Delaying recognition of a known impairment loss will change only the timing of the costs that recognition will cause, but not their amount. Thus, the only way a change in timing can affect decision making is through the effect of discounting.
    (If delaying recognition would increase the costs by more than the effect of the discount rate, even speakers of strong-FTR languages would have no motive to delay recognition.)

My comments on the explanations

The authors do not explain how managers can obtain the ‘discretionary’ measurements the authors describe if managers are complying with the methods IFRS standards require for use in estimating impairment losses. I discuss below 6 aspects of this issue:

  • compliance
  • discretion
  • psychological distance
  • costs considered by managers     
  • disclosure versus recognition
  • some confusing or misleading comments

Compliance

Do the effects observed by the authors arise when managers are doing their best to comply with IFRS Standards? Or do those effects arise from not complying with the Standards? The authors do not discuss that question, interesting though it is. In a couple of places, the authors do suggest that managers who speak strong-FTR languages are more likely to manipulate the reporting of goodwill impairment by intentionally shifting current impairment into future accounting periods.

For the rest of the discussion below, I will assume the authors think the effects they find arise even when managers are trying to comply with IFRS Standards.

Discretion

The author’s explanation relies crucially on the idea that managers have great discretion about when to recognise an impairment loss and how much that loss is.

Estimating the recoverable amount of a CGU does indeed involve significant estimates and require a lot of judgement. Nevertheless, the authors do not describe the nature of the discretion available to managers, and the extent of that discretion is less than the authors imply. In particular, the authors do not say that that the cash flows and discount rate are laid down (though subject to estimation uncertainty and possible bias).

The authors start with an assumption that estimates made in impairment tests are discretionary. From that assumption, they jump, without explanation, straight to an unjustified conclusion that managers are free to use in their impairment tests components that do not comply with IFRS Standards. Those components are:

  • discounting over psychological distance rather than over calendar time; and
  • possibly, some future costs that aren’t cash flows for the company.

Testing goodwill for impairment under IFRS Standards

Under IFRS Standards, cash-generating units (CGU) containing goodwill must be tested for impairment at least annually, and more often if indicators of impairment exist. An impairment loss must be recognized if the carrying amount of a CGU exceeds the CGU’s recoverable amount.

Estimating a CGU’s recoverable amount typically involves:

  • estimating the amount and timing of the cash flows that the CGU will generate; and then
  • discounting those estimated cash flows using discount rates that reflect market rates.

For estimating impairment losses, IFRS Standards do permit methods other than discounting future cash flows. Whenever I have heard people talking about impairment tests, they have focused wholly or mainly on discounted future cash flows. For brevity, I discuss only that approach in this post.    

Both steps (estimating the cash flows and determining the discount rates) involve subjective judgments about the future and estimates. Those estimates are subject to estimation uncertainty and possible bias. But:

  • the cash flows need to be cash flows that managers believe will occur for the company (not cash flows for some other party, such as the managers themselves).
  • the cash flows must be discounted.
  • the time that will elapse before the cash flows will occur must be measured using the calendar—not using managers’ perceptions of the ‘psychological distance’ from the present to the time when the cash flows will occur.
  • the estimated discount rates must reflect market rates.
  • the cash flows and discount rates need to fall within a range that the company’s auditors and regulators consider reasonable and as meeting the requirements listed above.

Even when accounting estimates are based at least partly on subjective judgments, those inputs need to result from managers’ best efforts to apply the measurement basis being used. https://accountingmiscellany.com/assumptions-are-not-just-a-throw-away/

Psychological distance

The authors refer to managers’ subjective feelings about the ‘psychological distance’ between the present and the future periods when managers expect cash flows to occur.

The authors do not explain they how think ‘psychological distance’ can affect manager’s estimates of impairment losses. ‘Psychological distance’ cannot directly influence managers’ estimates of the amount and timings of the cash flows used in impairment testing. Nor can it directly influence their estimates of the discount rates appropriate for those timings.

At most, managers’ subjective feelings of ‘psychological distance’ might lead to an indirect effect—by motivating managers to select an estimate at one point within the range of acceptable estimates, rather than an estimate at a different point.

Costs considered by managers

The authors’ explanation relies crucially on managers’ assessments of the costs that would result from recognising an impairment loss. The paper does not discuss in detail what those costs might be, though the paper does contain some hints.

Costs for the company

Some of the possible costs mentioned might be costs arising for the company from a:

  • possible drop in the company’s credit rating (leading to higher borrowing costs) or a possible breach of a loan covenant, leading to loss of credit lines.
  • possible loss of market share.
  • possible litigation against the company, or possible regulatory investigation of the company
  • possible loss of the company’s reputation

Costs for the managers

Other possible costs mentioned might be costs for the managers who make the impairment decision, rather than for the company:

  • possible loss of a bonus
  • possible dismissal
  • possible litigation against the managers or possible regulatory investigation of the managers
  • possible loss of the managers’ reputation

Costs for the shareholders

One possible cost mentioned is a possible future drop in the company’s share price. That would be a cost for the shareholders, not a cash flow for the company.

The share price might not change if investors had already concluded that an impairment had already occurred. And sometimes the share price even goes up if investors see the recognition of an impairment loss as a signal that management will start taking action to solve a problem.

Costs considered under IFRS Standards

The explicit cash flow estimates used in measuring impairment losses under IFRS Standards do not include:

  • costs affecting only the managers.
  • a drop in the company’s share price.

Although the authors aren’t totally explicit on this point, it appears that the discounting mechanism they envisage includes some costs that would not be part of the cash flows considered in impairment tests of goodwill applying IFRS Standards.

Disclosure versus recognition

The paper seems to assume that the costs of recognising an impairment loss are incurred only if the loss is in fact recognised. It does not discuss whether a company would also incur any of those costs if the company were to disclose information revealing that the company is very close to having to recognise an impairment loss. IFRS Standards require disclosure of some such information.

Some confusing or misleading comments

The paper includes some comments that may be confusing or misleading:

  • In several places, the authors talk about companies (or managers) ‘impairing goodwill’. Although many people use this loose language, it is misleading. It confuses the underlying economic event (goodwill has become impaired) with the accounting for that event (recognising the impairment loss).
  • The authors state that goodwill does not need to be written down if managers judge the impairment to be temporary.
    This statement is inaccurate. IFRS Standards have no notion of ‘temporary’ impairment. Estimates of recoverable amount are based on estimates of what the future cash flows will ultimately be. For an impairment to be temporary, managers would have to think that their estimate today of the future cash flows is lower than the estimate they will make at some point in the future. But, if this were the case, that future estimate would already be the estimate today. 
  • If costs would be relatively far in the future, the paper says that this fact might encourage speakers of strong-FTR languages ‘to delay the recognition of any impairment losses⎯even in the presence of strong impairment indicators’.
    This statement contradicts explicit requirements in IFRS Standards. Goodwill must always be tested for impairment (except in some cases which cannot apply if ‘strong impairment indicators’ are present). That test must use the methodology set out in the Standard (and summarised above).

Finding ‘abnormal’ impairment losses

The authors did not just look at the frequency and amount of goodwill impairment losses. They also carried out tests intended to assess what part of recognised goodwill impairment losses was discretionary—not economically justified. They developed 2 measures of the ‘discretionary’ part:  

  • 1st measure: ‘abnormal’ impairment losses—the component that is not ‘normal’. The normal component is a linear function of 1 macro-economic variable (GDP growth) and 5 company-specific variables: the company’s ratio of goodwill to total assets; its market to book ratio; its operating cash flow; the change in its sales; and the change in the return on its assets.
  • 2nd measure: ‘unexpected’ impairment losses—the component that is not ‘expected’. The expected component is the book value of equity, less the market value of equity. But the expected component: (a) cannot not be less than zero; and (b) cannot exceed the carrying amount of goodwill at the preceding period end.

Findings on ‘abnormal’ and ‘unexpected’ impairment

In these tests, the authors found that:

  • ‘abnormal’ goodwill impairment (both positive and negative) was lower in countries with languages with Weak-FTR.
  • weak-FTR was positively (and significantly) associated with negative ‘unexpected’ goodwill impairment, but was not significantly associated with positive ‘unexpected’ goodwill impairment.

The authors interpret these results as indicating that companies in countries using a weak-FTR language report impairment losses of greater quality. Those companies are more likely (than companies in other countries) to recognise an impairment loss immediately when there are economic indicators of impairment, rather than shifting the loss into a future period.

Comments on ‘abnormal’ and ‘unexpected’ impairment

I have reservations about how the authors distinguish 2 components of impairment losses, and about the labels they use for them:

  • There is nothing ‘abnormal’ about impairment losses being triggered by something other than the 6 ‘normal’ factors (GDP growth and 5 company-specific variables) identified by the authors. One obvious trigger would be an unexpected change in one or more of those variables—if a change was already expected, a previous impairment test ought to have picked that change up already. Other obvious triggers would be unexpected difficulties in integrating an acquired company, the entry of new competitors, or changes in consumer behaviour, in technology or in law.
    Recognising an impairment loss because of one of those factors (or many others) is not ‘abnormal’ and is not a sign of low-quality reporting.
    Similarly, when the effect of the 6 ‘normal’ variables is fully offset by equal valid variables pointing the other way, recognising no impairment loss is not a sign of low-quality reporting.
  • The authors base their measure of ‘expected’ impairment on the book value of equity, less its market value. That difference necessarily relates to the equity of the reporting entity as a whole. Unlike impairment losses on goodwill, changes in that difference can be positive or negative. Also, those differences are typically caused by several factors, not just by impairment losses within particular CGUs.    

In fact, using the authors’ measures of ‘normal’ or ‘expected’ impairment losses directly and unchanged to measure those impairment losses would undoubtedly reduce the quality of financial statements.

Economic significance

The paper comments on whether its findings are statistically significant, but does not discuss whether they are also economically significant. Knowing that a finding is statistically significant is, indeed, important. That fact tells you that there is only a small chance that the effect would have arisen by chance alone. But knowing statistical significance is not useful by itself:

  • if the effect is too small to be economically significant, it is not worth paying any attention to it.
  • if the effect is too large to be plausible, there might be an unidentified flaw in the methodology. For example, in this case, an implausibly large result might not reflect a difference between weak-FTR and strong-FTR languages. It might instead reflect some factor (perhaps institutional, cultural or economic) that was not one of the (many) factors the authors did consider in their analysis.

One of the authors told me that a draft of the paper had included some analysis of economic significance, but a reviewer advised the authors to take it out. The practice of not discussing economic significance is widespread among accounting academics. Perhaps that is why the reviewer advised these authors to remove their draft analysis. I’m not criticising them for following that advice.

I have spent quite a bit of time trying to understand whether the effect found by the authors is economically significant, but I am still no nearer to knowing whether the effect is:

  • too small to deserve any attention;
  • too large to be plausible; or
  • within a range indicating that people should take the effect seriously.

It is a pity that the paper does not discuss the economic significance of the findings at all. The lack of such a discussion makes it difficult to interpret papers of this kind. Even if a full and rigorous analysis of economic significance is not feasible, a high-level analysis (and a summary of the limitations of the analysis) would be much better than nothing.  

Conclusions

I found this paper very interesting and enlightening. The paper discusses whether (and how) one property of a language might affect one type of behaviour: implementing impairment tests of goodwill. That property is whether the language routinely marks verbs referring to the future. The paper investigates whether (and why) speakers of a language marking verbs as future are less likely to report an impairment loss of goodwill than speakers of languages not marking verbs in this way.

I summarise below 3 concerns I have about the paper:

  • the findings and the author’s explanation for their findings.
  • measuring economic justification
  • economic significance

Findings and the authors’ explanations

The authors found data suggesting that a company is more likely to recognise an impairment loss on goodwill if the company’s base is in a country where the language routinely marks verbs referring to the future. The authors’ explanation for this data rests heavily on the authors’ view that:

  • managers’ decisions about impairment are discretionary.
  • managers base those decisions on discounted estimates of costs. The costs are ones that will result from recognising an impairment loss. Managers discount those estimated costs over a period that is the ‘psychological distance’ from the present until the time when the entity will have to pay the costs.

Unfortunately, the authors do not compare that discounting mechanism with the requirements in IFRS Standards. They do not explain how (or indeed whether) managers can use that mechanism while still complying with those Standards:

  • the Standards require discounting over a period measured by the calendar, not over a period measured by perceived ‘psychological distance’ from the present.
  • the costs considered in the impairment test must be costs for the company, rather than costs for the managers or for the shareholders.

Overall, the authors do not succeed in explaining how the discounting mechanism they postulate can produce the effects they found.  

Measuring economic justification

I commend the authors for trying to assess whether the earlier and larger impairment losses reported by speakers of weak-FTR languages are economically justified. Nevertheless, I have reservations about:

  • both measures they use in that assessment.
  • the labels they use for those measures (‘normal’ and ‘expected’).

Measurements that contain ‘abnormal’ or ‘unexpected’ impairment losses are not necessarily of high quality—and measurements containing only ‘normal’ or only ‘expected’ impairment losses may well be of low quality.

Economic significance

Although the paper discusses whether its findings are statistically significant, it does not discuss whether they are also economically significant. I couldn’t tell whether the findings are:

  • too small to deserve any attention;
  • too large to be plausible; or
  • within a range indicating that people should take the findings seriously.

In my view, any paper discussing data that may be of interest to policymakers (for instance, accounting standard setters) should contain some discussion of economic significance, even if it is not possible to draw full and rigorous conclusions. That discussion should be drafted in a way that policymakers can be expected to understand.

A final word

I would love to see more research on how the properties of someone’s language affects that person’s behaviour. There is lots of scope for more research of this kind in accounting and finance, and also in many other areas.

I congratulate these authors for being among the pioneers of this kind of research. I look forward to seeing much more research by them and by many other researchers.

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If you would like to comment on this post, please go to the comment box at the end of the post (after the appendix).

Appendix

From the list of references

To provide a useful resource for future work, I have extracted below from the authors’ list of references those references that relate to sources about: language; culture; discounting effects of future events; and accounting. I don’t include their more general references.

About language

Atasoy, O. (2013). How Your Language Affects Your Wealth and Health. Scientific American.

Boroditsky, L. (2001). Does language shape thought?: Mandarin and English speakers’ conceptions of time. Cognitive Psychology, 43(1), 1–22.

Chen, M. K. (2013). The effect of language on economic behavior: Evidence from savings rates, health behaviors, and retirement assets. American Economic Review, 103(2), 690–731

Chen, S., Cronqvist, H., Ni, S., & Zhang, F. (2017). Languages and corporate savings behavior. Journal of Corporate Finance, 46, 320–341.

Cheng, C. S., Kim, J., Rhee, M., & Zhou, J. (2021). Time Orientation in Languages and Tax Avoidance. Journal of Business Ethics, 1–26.

Chi, J. D., Su, X., Tang, Y., & Xu, B. (2020). Is language an economic institution? Evidence from R&D investment. Journal of Corporate Finance, 62, 101578.

Choi, S., & Bowerman, M. (1991). Learning to express motion events in English and Korean: The influence of language-specific lexicalization patterns. Cognition, 41(1–3), 83–121.

Clark, H. H. (1996). Communities, commonalities. Rethinking Linguistic Relativity, 17, 324.

Dahl, Ö. (2000). The grammar of future time reference in European languages. In Tense and Aspect in the Languages of Europe (Vol. 6, pp. 309–328). Mouton de Gruyter Berlin.

Farwell, C. B. (1977). The primacy of goal in the child’s description of motion and location. Papers and Reports in Child Language Development, 13, 126–133.

Gotti, G., Roberts, S. G., Fasan, M., & Robertson, C. B. J. (2021). Language in economics and accounting research: The role of linguistic history. The International Journal of Accounting, 56(03), 2150015.

Gruendel, J. (1977). Locative production in the single word utterance period: A study of up-down, on-off, and in-out. Biennial Meeting of the Society for Research in Child Development, New Orleans, March.

Huang, W., & Kim, J. (2020). Linguistically Induced Time Perception and Asymmetric Cost Behavior. Management International Review, 1–31.

Ingram, D. (1971). Transitivity in child language. Language, 888–910.

Jäggi, T., Sato, S., Gillioz, C., & Gygax, P. M. (2022). Is the future near or far depending on the verb tense markers used? An experimental investigation into the effects of the grammaticalization of the future. Plos one, 17(1), e0262778.

Kim, J., Kim, Y., & Zhou, J. (2017). Languages and earnings management. Journal of Accounting and Economics, 63(2–3), 288–306. https://doi.org/10.1016/J.JACCECO.2017.04.001

Kim, J., Kim, Y., & Zhou, J. (2020). Time encoding in languages and investment efficiency. Management Science, 67(4), 2609–2629.

Levinson, S. C., & Wilkins, D. P. (2006). Grammars of space: Explorations in cognitive diversity. Cambridge University Press.
[This book is an edited collection. Levinson and Wilkins are the editors and contributed the opening and closing chapters: 1. The background to the study of the language of space 14. Patterns in the data: towards a semantic typology of spatial description.]

Liang, H., Marquis, C., Renneboog, L., & Sun, S. L. (2018). Future-time framing: The effect of language on corporate future orientation. Organization Science, 29(6), 1093–1111.

Mavisakalyan, A., Tarverdi, Y., & Weber, C. (2018). Talking in the present, caring for the future: Language and environment. Journal of Comparative Economics, 46(4), 1370–1387.

Mavisakalyan, A., Tarverdi, Y., & Weber, C. (2022). Heaven can wait: future tense and religiosity. Journal of Population Economics, 35(3), 833–860

Mavisakalyan, A., & Weber, C. (2018). Linguistic structures and economic outcomes. Journal of Economic Surveys, 32(3), 916–939.

Nelson, K. (1974). Concept, word, and sentence: Interrelations in acquisition and development. Psychological Review, 81(4), 267.

Pérez, E. O., & Tavits, M. (2017). Language shapes people’s time perspective and support for future‐oriented policies. American Journal of Political Science, 61(3), 715–727.

Pinker, S. (1989). Learnability and cognition: The acquisition of argument structure. Cambridge, MA: MIT Press.

Roberts, S. G., Winters, J., & Chen, K. (2015). Future tense and economic decisions: controlling for cultural evolution. PloS One, 10(7), e0132145.

Robertson, C., & Roberts, S. (2020). Not when but if: Modality and future time reference in English, Dutch and German.

Santacreu-Vasut, E., Shenkar, O., & Shoham, A. (2017). Linguistic gender marking and its international business ramifications. In Language in international business (pp. 194-208). Palgrave Macmillan, Cham.

Slobin, D. I. (2003). Language and thought online: Cognitive consequences of linguistic relativity. Language in Mind: Advances in the Study of Language and Thought, 157192.

Sutter, M., Angerer, S., Rützler, D., & Lergetporer, P. (2015). The effect of language on economic behavior: Experimental evidence from children’s intertemporal choices.

Thieroff, R. (2000). On the areal distribution of tense-aspect categories in Europe. Tense and Aspect in the Languages of Europe, 265–305.

Tomasello, M. (1987). Learning to use prepositions: A case study. Journal of Child Language, 14(1), 79–98.

Trope, Y., & Liberman, N. (2003). Temporal construal. Psychological Review, 110(3), 403.

Whorf, B. L. (1956). Language, thought, and reality: Selected writings of Benjamin Lee Whorf (Ed. John B). MIT Press.

About culture

Adam, B. (2005). Timescapes of modernity: The environment and invisible hazards. Routledge.

Casasanto, D. (2008). similarity and Proximity: When Does Close in space mean Close in mind? Memory & Cognition, 36(6), 1047–1056.

Cialdini, R. B., & Goldstein, N. J. (2004). Social influence: Compliance and conformity. Annual Review of Psychology, 55, 591–621.

Doupnik, T. S. (2008). Influence of culture on earnings management: A note. Abacus, 44(3), 317–340.

Gadenne, D., Sharma, B., Kerr, D., & Smith, T. (2011). The influence of consumers’ environmental beliefs and attitudes on energy saving behaviours. Energy Policy, 39(12), 7684–7694.

Halabi, H., Alshehabi, A., & Zakaria, I. (2019). Informal institutions and managers’ earnings management choices: Evidence from IFRS-adopting countries. Journal of Contemporary Accounting and Economics, 15(3). https://doi.org/10.1016/j.jcae.2019.100162

Helmke, G., & Levitsky, S. (2004). Informal institutions and comparative politics: A research agenda. Perspectives on Politics, 2(4), 725–740.

Jackson, T. (2007). Cross-cultural sensitivities in developing corporate ethical strategies and practices. In Corporate ethics and corporate governance (pp. 229–247). Springer.

Javidan, M., Dorfman, P. W., Luque, M. S. De, & House, R. J. (2006). In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project GLOBE. Academy of Management Perspectives. https://doi.org/10.5465/AMP.2006.19873410

Klerman, D. M., Mahoney, P. G., Spamann, H., & Weinstein, M. I. (2011). Legal origin or colonial history?. Journal of Legal Analysis, 3(2), 379-409.

Mazzi, F., Slack, R., & Tsalavoutas, I. (2018). The effect of corruption and culture on mandatory disclosure compliance levels: goodwill reporting in Europe. Journal of International Accounting, Auditing and Taxation, 31, 52–73.

Mischel, W., Grusec, J., & Masters, J. C. (1969). Effects of expected delay time on the subjective value of rewards and punishments. Journal of Personality and Social Psychology, 11(4), 363.

Mischel, W., Shoda, Y., & Rodriguez, M. I. (1989). Delay of gratification in children. Science, 244(4907), 933–938.

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About discounting effects of future events

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About accounting

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Lapointe-Antunes, P., Cormier, D., & Magnan, M. (2009). Value relevance and timeliness of transitional goodwillimpairment losses: Evidence from Canada. The International Journal of Accounting, 44(1), 56–78.

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Ramanna, K., & Watts, R. L. (2012). Evidence on the use of unverifiable estimates in required goodwill impairment. Review of Accounting Studies, 17(4), 749–780.

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Rennekamp, K., Rupar, K. K., & Seybert, N. (2015). Impaired judgment: The effects of asset impairment reversibility and cognitive dissonance on future investment. The Accounting Review, 90(2), 739–759.

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Siekkinen, J. (2016). Value relevance of fair values in different investor protection environments. Accounting Forum, 40(1), 1–15.

Stein, S. E. (2019). Auditor industry specialization and accounting estimates: Evidence from asset impairments. Auditing: A Journal of Practice & Theory, 38(2), 207–234.

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