Investigation of Income Smoothing Through Asset Sales

This paper investigates income smoothing through the asset sales. We tested income smoothing in the level of operating income. The test based on a linear multi-regression analysis for the companies listed in Tehran Exchange during 1381-1385. Investigation supports income smoothing so that managers use the gains and losses of the asset sales to smooth earnings. Our evidence also indicate that the level of smoothing in the companies that experience lower level of operating income is more than those which experiencing higher level of operating income.