Trade‐offs between Tax and Financial Reporting Benefits: Evidence from Purchase Price Allocations in Taxable Acquisitions

2019 ◽  
Vol 36 (3) ◽  
pp. 1223-1262 ◽  
Author(s):  
Daniel Lynch ◽  
Miles Romney ◽  
Bridget Stomberg ◽  
Daniel Wangerin ◽  
John R. Robinson
Keyword(s):  
Financial Reporting ◽  
Purchase Price ◽  
Trade Offs

scholarly journals Costing interventions in the field: preliminary cost estimates and lessons learned from an evaluation of community-wide mass drug administration for elimination of soil-transmitted helminths in the DeWorm3 trial

BMJ Open ◽  
2021 ◽  
Vol 11 (7) ◽  
pp. e049734
Author(s):  
Katya Galactionova ◽  
Maitreyi Sahu ◽  
Samuel Paul Gideon ◽  
Saravanakumar Puthupalayam Kaliappan ◽  
Chloe Morozoff ◽  
...  
Keyword(s):  
Data Collection ◽  
Drug Administration ◽  
Financial Reporting ◽  
Mass Drug Administration ◽  
Lessons Learned ◽  
Secondary Outcome ◽  
Data Quality Control ◽  
Soil Transmitted Helminths ◽  
Trade Offs ◽  
Rich Data

ObjectiveTo present a costing study integrated within the DeWorm3 multi-country field trial of community-wide mass drug administration (cMDA) for elimination of soil-transmitted helminths.DesignTailored data collection instruments covering resource use, expenditure and operational details were developed for each site. These were populated alongside field activities by on-site staff. Data quality control and validation processes were established. Programmed routines were used to clean, standardise and analyse data to derive costs of cMDA and supportive activities.SettingField site and collaborating research institutions.Primary and secondary outcome measuresA strategy for costing interventions in parallel with field activities was discussed. Interim estimates of cMDA costs obtained with the strategy were presented for one of the trial sites.ResultsThe study demonstrated that it was both feasible and advantageous to collect data alongside field activities. Practical decisions on implementing the strategy and the trade-offs involved varied by site; trialists and local partners were key to tailoring data collection to the technical and operational realities in the field. The strategy capitalised on the established processes for routine financial reporting at sites, benefitted from high recall and gathered operational insight that facilitated interpretation of the estimates derived. The methodology produced granular costs that aligned with the literature and allowed exploration of relevant scenarios. In the first year of the trial, net of drugs, the incremental financial cost of extending deworming of school-aged children to the whole community in India site averaged US$1.14 (USD, 2018) per person per round. A hypothesised at-scale routine implementation scenario yielded a much lower estimate of US$0.11 per person treated per round.ConclusionsWe showed that costing interventions alongside field activities offers unique opportunities for collecting rich data to inform policy toward optimising health interventions and for facilitating transfer of economic evidence from the field to the programme.Trial registration numberNCT03014167; Pre-results.

The Hole in the Doughnut: Accounting for Acquired Intangibles at Krispy Kreme

2006 ◽  
Vol 21 (3) ◽  
pp. 297-312 ◽  
Author(s):  
Lori Holder-Webb ◽  
Mark Kohlbeck
Keyword(s):  
Executive Compensation ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Real World ◽  
Intangible Assets ◽  
Purchase Price ◽  
Real World Setting ◽  
Exit Costs ◽  
Accounting Courses ◽  
Public Offering

Krispy Kreme Doughnuts, Inc. used a 2000 initial public offering (IPO) to embark on an active expansion and franchise reacquisition program. This case focuses on this high-visibility franchise reacquisition program and several associated and highly controversial accounting issues, and provides an opportunity to examine numerous technical and conceptual issues in a real-world setting. In the case, you will encounter a variety of financial reporting issues—from identification and valuation of uncommon intangible assets in Part 1, to acquisition accounting, purchase-price allocations, contingent consideration, exit costs, executive compensation, and loan impairments in Part 2. The case is appropriate for use in intermediate and advanced accounting courses.

Trade-Offs between Tax and Financial Reporting Benefits: Evidence from Taxable Acquisitions

2015 ◽  
Author(s):  
Dan Lynch ◽  
Miles A. Romney ◽  
Bridget Stomberg ◽  
Daniel Wangerin
Keyword(s):  
Financial Reporting ◽  
Trade Offs

The Effects of Stock-Based Incentives on Inventory Management

2021 ◽  
Author(s):  
Qi Wu ◽  
Guoming Lai
Keyword(s):  
Empirical Analysis ◽  
Inventory Management ◽  
Financial Reporting ◽  
Operations Management ◽  
Stock Price ◽  
Marginal Effect ◽  
Public Firms ◽  
Top Executives ◽  
Sarbanes Oxley ◽  
Trade Offs

Classic inventory theories typically focus on the operational trade-offs to optimize inventory decisions. However, managers of public firms who obtain stock-based incentives may alter inventory operations to influence the stock price. We develop a stylized model, which shows that, in the presence of an interest in the stock price, managers over-install inventory when it can either inflate sales or deflate the reported cost of goods sold even if the market anticipates such actions. We analyze the joint and marginal effects of the stock-based incentives and the cost of using inventory to manage earnings, which may provide useful implications for the detection of inventory distortion and the design of management incentive plans. We then conduct an empirical analysis based on the financial data of U.S. publicly listed retailers and manufacturers. We find positive (negative) correlation between firms’ abnormal excess inventory and the stock-based incentives of their top executives (the inventory manipulation cost). Moreover, the marginal effect of the stock-based incentives on the abnormal excess inventory is the strongest when the inventory manipulation cost is intermediate. Our empirical analysis also shows that this effect becomes statistically weaker after the passage of the Sarbanes–Oxley Act. This is in line with the prediction of our analytical model about the effect of the accuracy of financial reporting. This paper was accepted by Vishal Gaur, operations management.

scholarly journals The Relative Importance of Search versus Credence Product Attributes: Organic and Locally Grown

2011 ◽  
Vol 40 (1) ◽  
pp. 48-62 ◽  
Author(s):  
Ferdinand F. Wirth ◽  
John L. Stanton ◽  
James B. Wiley
Keyword(s):  
Production Method ◽  
Organic Production ◽  
Local Foods ◽  
Relative Importance ◽  
Purchase Price ◽  
Organic Foods ◽  
Trade Offs ◽  
Credence Attributes ◽  
Analysis Experiment ◽  
Locally Grown

Organic foods and local foods have come to the forefront of consumer issues, due to concerns about nutrition, health, sustainability, and food safety. A conjoint analysis experiment quantified the relative importance of, and trade-offs between, apple search and experience attributes (quality/blemishes, size, flavor), credence attributes (conventional vs. organic production method, local origin vs. product of USA vs. imported), and purchase price when buying apples. Quality is the most important apple attribute. Production method—organic versus conventional—had no significant impact on preferences.

scholarly journals Efficient contracting, earnings smoothing and managerial accounting discretion

2014 ◽  
Vol 15 (1) ◽  
pp. 100-123 ◽  
Author(s):  
Mohamed Khalil ◽  
Jon Simon
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Legal Protection ◽  
Income Smoothing ◽  
Least Square ◽  
Managerial Accounting ◽  
Content Type ◽  
Accounting Choices ◽  
Trade Offs ◽  
Reported Earnings

Purpose – The purpose of this paper is to examine whether the contracting incentives (i.e. bonus plans, debt covenants, political costs hypotheses), and income smoothing can explain accounting choices in an emerging country, Egypt. Design/methodology/approach – The paper uses the ordinary least square regression model to examine the relationship between earnings management and reporting objectives. A sample of 438 non-financial firms listed on the Egyptian Exchange over the period 2005-2007 is used. Findings – The paper finds that the contracting objectives explain little of the variations in accounting choices (i.e. discretionary accruals) in the Egyptian context. However, the paper finds that mangers are likely to smooth the reported earnings by managing the accrual component in an attempt to reduce the fluctuation in reported earnings by increasing (decreasing) earnings when earnings are low (high) in attempt to reduce the variability of the reported earnings. Research limitations/implications – The empirical results rely on the ability of earnings management proxies to adequately capture earnings manipulation activities. Practical implications – The findings of the study should be of substantial interest to regulators and policy makers. The results implicitly contribute to the ongoing argument in relation to the optimal flexibility permitted by standard setting and the argument that tightening the accounting standards and mandating International Financial Reporting Standards are likely to improve reporting quality and reduce opportunistic earnings management. The results reveal that many of the weaknesses related to corporate reporting in emerging countries may result from the inadequate enforcement of the law and the weak legal protection of minority shareholders. The results also highlight the crucial role of understanding the reporting incentives, which is mainly shaped by institutional and market forces and the legal environment, in explaining accounting choices. Originality/value – Unlike previous studies that tested an individual objective, this study examines the trade-offs among various reporting objectives in an emerging economy.

scholarly journals Pengaruh Agresivitas Pelaporan Keuangan terhadap Agresivitas Pajak dengan Mekanisme Good Corporate Governance sebagai Pemoderasi

2020 ◽  
Vol 8 (2) ◽  
pp. 157-166
Author(s):  
Mahasani Puspitarani Krismonika ◽  
Nilda Tartila
Keyword(s):  
Corporate Governance ◽  
Multiple Regression ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Tax Aggressiveness ◽  
Good Corporate Governance ◽  
Trade Offs

Companies are currently involved in various forms of tax planning to reduce the estimated tax liability. On the other hand, aggressive tax actions are bad for the companies because it requires them  to report lower profits.  Frank et al (2009) found there was a tendency that companies were able to report greater profits and have a low tax burden simultaneously. Thus,  it can be said that trade-offs don't always occur. This study aims to assess the influence of the aggressiveness of financial reporting on tax aggressiveness in manufacturing companies from 2015-2018 by using the mechanism of Good Corporate Governance as a moderating variable.   The data used in this study are secondary data obtained from the financial statements and annual reports of manufacturing companies from the Indonesia Stock Exchange. The population of this research is 27 manufacturing companies listed on the Indonesia Stock Exchange. Selection of the sample was done using the purposive sampling method. The analytical method used in this research is multiple regression or multiple regression with the SPSS version 25 computer program.  Hypothesis test was performed using multiple regression methods and MRA (Moderated Regression Analysis).             The results of this study indicate that the aggressiveness of financial reporting on manufacturing companies simultaneously has a significant positive effect on tax aggressiveness with a significance value of 0.003. The mechanism of Good Corporate Governance with indicators of Institutional Ownership and Managerial Ownership simultaneously has a significant negative effect on tax aggressiveness with a significance value of 0.001 and 0.007. As well as the mechanism of Good Corporate Governance, it is stated that it can weaken the effect of the aggressiveness of financial reporting on tax aggressiveness. Key words : Financial Reporting Agressiveness, Tax Aggressiveness, and Good Corporate Governance

Discussion of The Effects of Financial Reporting on Bank Loan Contracting in Global Markets: Evidence from Mandatory IFRS Adoption

2015 ◽  
Vol 14 (2) ◽  
pp. 83-87
Author(s):  
Steve Lin
Keyword(s):  
Information Asymmetry ◽  
Financial Reporting ◽  
Research Question ◽  
Bank Loan ◽  
Global Markets ◽  
Ifrs Adoption ◽  
Loan Contracting ◽  
Trade Offs

ABSTRACT This discussion is written for “The Effect of Financial Reporting on Bank Loan Contracting in Global Markets: Evidence from Mandatory IFRS Adoption” by Chen, Chin, Wang, and Yao (2015). I begin with the research question and a brief summary of the main findings of this study and subsequently discuss the strengths and some potential limitations of the study. This study seeks to contribute to the literature by investigating the effect of mandatory IFRS adoption in 18 countries on price and non-price contract terms. The evidence provided in this study suggests that mandatory IFRS adoption increases information asymmetry between firms and loan providers, which leads to trade-offs between contract terms.

Novel players fine-tune plant trade-offs

2015 ◽  
Vol 58 ◽  
pp. 83-100 ◽  
Author(s):  
Selena Gimenez-Ibanez ◽  
Marta Boter ◽  
Roberto Solano
Keyword(s):  
Ubiquitin Ligase ◽  
Feedback Loop ◽  
Molecular Level ◽  
26S Proteasome ◽  
Signalling Molecules ◽  
Transcriptional Reprogramming ◽  
Trade Offs ◽  
Jaz Proteins ◽  
Regulatory Feedback Loop ◽  
Fine Tune

Jasmonates (JAs) are essential signalling molecules that co-ordinate the plant response to biotic and abiotic challenges, as well as co-ordinating several developmental processes. Huge progress has been made over the last decade in understanding the components and mechanisms that govern JA perception and signalling. The bioactive form of the hormone, (+)-7-iso-jasmonyl-l-isoleucine (JA-Ile), is perceived by the COI1–JAZ co-receptor complex. JASMONATE ZIM DOMAIN (JAZ) proteins also act as direct repressors of transcriptional activators such as MYC2. In the emerging picture of JA-Ile perception and signalling, COI1 operates as an E3 ubiquitin ligase that upon binding of JA-Ile targets JAZ repressors for degradation by the 26S proteasome, thereby derepressing transcription factors such as MYC2, which in turn activate JA-Ile-dependent transcriptional reprogramming. It is noteworthy that MYCs and different spliced variants of the JAZ proteins are involved in a negative regulatory feedback loop, which suggests a model that rapidly turns the transcriptional JA-Ile responses on and off and thereby avoids a detrimental overactivation of the pathway. This chapter highlights the most recent advances in our understanding of JA-Ile signalling, focusing on the latest repertoire of new targets of JAZ proteins to control different sets of JA-Ile-mediated responses, novel mechanisms of negative regulation of JA-Ile signalling, and hormonal cross-talk at the molecular level that ultimately determines plant adaptability and survival.

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