Financial Accounting and Corporate Behavior

David I. Walker

doi:10.2139/ssrn.894002

journal article Jan 01, 2006

Financial Accounting and Corporate Behavior

David I. Walker

SSRN Electronic Journal · Elsevier BV

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References

42

[1]

See IRC � 10.1017/s0035336100114546

[2]

COGS = value of opening inventory + inventory purchased -value of closing inventory. Compared with FIFO, LIFO results in reduced gross profit and taxable income during inflationary periods because LIFO results in a relatively lower closing inventory valuation and a relatively greater cost of goods sold

[3]

J Michael Federal Income Taxation: Principles and Policies 750-54 (5 th (2005)

[4]

See Graetz & Schenk, supra note x

[5]

See Paul "A Comparative View of Accounting Regulations" The SEC and Accounting: The First 50 Years: 1984 Proceedings of the Arthur Young Professors' Roundtable

[6]

Irc � 446 10.1017/s0035336100161970

[7]

However, some tax incentives would remain. For example, although GAAP limits depreciation to cost minus salvage value, accelerated depreciation methods, such as the 200% declining balance method, are allowable

[8]

Irc � 173

[9]

Irc � 174 10.1017/s1026881200034152

[10]

Irc � 175

[11]

Irc � 10.1017/s1026881200126819

[12]

E G Irc � 179a

[13]

"The allowance was later increased to 50% for property acquired after May 5, 2003, and placed in service before" The 30% bonus depreciation allowance applied to certain property acquired after September 10 (2001)

[14]

Impact on Corporate Creditors

[15]

See Michael Federal Income Taxation (2005)

[16]

See Joint Committee on Taxation 10.4135/9781483300498.n352

[17]

"In determining the level of tax expenditure associated with accelerated depreciation and "bonus" expensing, the JCT uses a straight-line depreciation baseline. See id. at 6. 219 As discussed supra note x, a majority of U.S. controlled corporations reported no tax liability for 2000. However, because corporate tax losses can be carried forward and back in time, a company reporting no tax liability for a particular year is not necessarily insensitive to tax incentives. See IRC � 172. 220 Facts about FASB, supra note x (quote from mission statement). See also David Solomons" Making Accounting Policy (1986)

[18]

H Victor Accounting Standards: Their Economic and Social Consequences, Acct. Horizons (1990)

[19]

See Brown, supra note x (1990)

[20]

Solomons (1986) 10.1136/bmj.1.4127.232

[21]

See David "The Saxe Lectures in Accounting" Financial Accounting, the Standards Board and Economic Development (1973)

[22]

See Stephen "The Rise of "Economic Consequences" J. Acct (1978)

[23]

See Hawkins, supra note x

[24]

See Facts about FASB, supra note x, at 2 (mission statement)

[25]

"Exposure Draft: Share-Based Payment" Financial Accounting Standards Board (2004)

[26]

See Id at 2 (arguing that value relevance could be undermined "if standard setting and GAAP is captured by tax rule-makers

[27]

Hanlon & Shevlin (2004)

[28]

See Gary John Previts & Dale "A Perspective on the New Deal and Financial Reporting: Andrew Barr and the Securities Exchange Commission" Bus. & Econ. His (1938)

[29]

Joel Seligman "The SEC and Accounting: A Historical Perspective" The SEC and Accounting: The First 50 Years: 1984 Proceedings of the Arthur Young Professors' Roundtable (1984)

[30]

See Seligman, supra note x

[31]

See id.; Previts & Flesher, supra note x

[32]

David Solomons "The Political Implications of Accounting and Accounting Standard Setting" Acct. & Bus. Res (1983) 10.1080/00014788.1983.9729739

[33]

See Previts & Flesher, supra note x

[34]

See Stanley "Tax Incentives as a Device for Implementing Government Policy: A Comparison with Direct Government Expenditures, 83 Harv" L. Rev (1970)

[35]

Stanley S Surrey Pathways to Tax Reform: The Concept of Tax Expenditures (1973) 10.4159/harvard.9780674436503

[36]

S Stanley Tax Expenditures (1985)

[37]

See Surrey, Tax Incentives, supra note x

[38]

& Surrey 10.4159/harvard.9780674436527

[39]

See Surrey, Pathways, supra note x, at 729-30 & n

[40]

"For that matter, tax incentives are much less open ended than they used to be. Increasingly, tax incentive provisions are enacted for a limited period and must be affirmatively renewed to continue in force" Allowance for Certain Property Acquired (2001)

[41]

See Surrey, Pathways, supra note x

[42]

& Surrey 10.4159/harvard.9780674436527

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Published: Jan 01, 2006

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David I. Walker

Cite This Article

David I. Walker (2006). Financial Accounting and Corporate Behavior. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.894002

Financial Accounting and Corporate Behavior

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