In the clean surplus accounting framework, the dividend discount model transforms into an earnings-based valuation model, highlighting the critical roles of earnings and book value in equity valuation. However, earnings and book value are accounting attributes governed by accounting principles. This chapter addresses the impact of accounting conservatism on the dynamics of earnings information and equity valuation. Given the inherent difficulty of forecasting earnings over multiple periods and consistent with the analysis in the last chapter, we focus on predicting one-period-ahead earnings.