In income classification shifting, firms shift recurring income components (in core earnings) that are income reducing to items commonly assumed to be nonrecurring (special items) to increase core earnings, which are used by analysts and investors to forecast future earnings and value a firm. Some special items tend to extend over multiple quarters and are more amenable to classification shifting because it is easier to shift core expenses into those items (continuous special items). Nevertheless, as the recurrence of special items increases, the market perceives them more like recurring earnings components (Cready et al. in Account Rev 85(5):1577–1615, 2010), which reduces the benefits of classification shifting. Therefore, we hypothesize that when special items are continuous and first in a sequence of quarterly continuous special items, firms are more likely to use them to shift income than when continuous special items are last in the series. Our results confirm our expectations. The findings highlight that the location of a continuous special item in a sequence of continuous special items affects the likelihood of income classification shifting.

在收入分类转移中，公司将经常性收入组成部分（核心收益）转移到通常被认为是非经常性的项目（特殊项目），以增加核心收益，分析师和投资者用这些成分来预测未来收益和对公司进行估值。一些特殊项目往往会延续多个季度，并且更适合分类转移，因为更容易将核心费用转移到这些项目（连续特殊项目）中。然而，随着特殊项目重复次数的增加，市场认为它们更像是经常性收益组成部分（Cready 等人，in Account Rev 85(5):1577–1615, 2010），这减少了分类转移的好处。因此，我们假设，当特殊项目是连续的并且位于一系列季度连续特殊项目序列中的第一个时，企业更有可能使用它们来转移收入，而不是当连续特殊项目位于序列中的最后一个时。我们的结果证实了我们的期望。研究结果强调，连续特殊项目在一系列连续特殊项目中的位置会影响收入分类转变的可能性。