Singapore Airlines: Accounting for Income Taxes

2002 ◽  
Vol 06 (02) ◽  
pp. 241-254
Author(s):  
Winston Kwok ◽  
Yew Kee Ho
Keyword(s):  
Accounting Standards ◽  
Income Taxes ◽  
Financial Statement ◽  
Financial Analyst ◽  
Deferred Taxes ◽  
Accounting Courses ◽  
Accounting Changes ◽  
Accounting For Income Taxes ◽  
The Impact

Singapore Airlines: Accounting for Income Taxes. A proposed standard on accounting for income taxes would affect the bottomline figures of many companies in Singapore, including a major international company, Singapore Airlines Ltd (SIA). Students have to assume the role of a financial analyst who would have to assess the impact of the change. This is a case that introduces some of the more contentious issues relating to deferred taxes and can be used in intermediate or advanced accounting courses, M.B.A. or executive programs, and courses in financial statement analysis. The objectives of the case are threefold. First, it helps students understand better the conceptual issues associated with deferred taxes. Secondly, it requires students to assess the impact of the proposed accounting changes on key financial figures and ratios. Thirdly, it engages the student to discuss the strategic implications of accounting standards on taxes in relation to management's ability to manage their bottomline numbers.

Inferring U.S. Tax Liability from Financial Statement Information

2009 ◽  
Vol 31 (1) ◽  
pp. 29-63 ◽  
Author(s):  
Petro Lisowsky
Keyword(s):  
Stock Options ◽  
Accounting Standards ◽  
Financial Statements ◽  
Income Taxes ◽  
Financial Accounting ◽  
Financial Statement ◽  
Corporate Tax ◽  
Data Set ◽  
Accounting For Income Taxes ◽  
Tax Expense

Abstract: Using a multi-year matched tax return-financial statement data set, this study builds empirical models that infer U.S. tax liability on the corporate tax return from publicly available financial statement disclosures, including those of Statement on Financial Accounting Standards No. 109, Accounting for Income Taxes. Results show that current U.S. tax expense, the tax benefit from stock options, current-year tax cushion accrual, consolidation book-tax differences, and R&D are informative in inferring actual tax, while intraperiod tax allocation is not. Additionally, the sign of pretax book income and the existence of net operating loss carryforwards are useful partitioning variables in estimating actual tax. In general, for every dollar of current U.S. tax expense reported on the financial statements, approximately $0.70 is reported in U.S. tax liability on the tax return. The models are validated using a holdout sample, providing support for the notion that public parties can reliably use these results to estimate a firm's tax position. Additional tests reveal a hierarchy of subsamples that researchers may employ when maximizing the usefulness of tax-related disclosures in inferring U.S. tax liability.

Comprehensive Income: which potential effects on firms' performance evaluation and users' decision process?

2016 ◽  
pp. 55-94
Author(s):  
Pier Luigi Marchini ◽  
Carlotta D'Este
Keyword(s):  
Performance Evaluation ◽  
Decision Process ◽  
Financial Analysts ◽  
Listed Companies ◽  
Financial Statement ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
Gains And Losses ◽  
The Impact

The reporting of comprehensive income is becoming increasingly important. After the introduction of Other Comprehensive Income (OCI) reporting, as required by the 2007 IAS 1-revised, the IASB is currently seeking inputs from investors on the usefulness of unrealized gains and losses and on the role of comprehensive income. This circumstance is of particular relevance in code law countries, as local pre-IFRS accounting models influence financial statement preparers and users. This study aims at investigating the role played by unrealized gains and losses reporting on users' decision process, by examining the impact of OCI on the Italian listed companies RoE ratio and by surveying a sample of financial analysts, also content analysing their formal reports. The results show that the reporting of comprehensive income does not affect the financial statement users' decision process, although it statistically affects Italian listed entities' performance.

scholarly journals The Impact of Financial Statement Comparability on Earnings Management: Evidence from Frontier Markets

2020 ◽  
Vol 8 (4) ◽  
pp. 73
Author(s):  
Wil Martens ◽  
Prem W. S. Yapa ◽  
Maryam Safari
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Common Law ◽  
Accounting Standards ◽  
Real Earnings Management ◽  
Financial Statement ◽  
Financial Reporting Standards ◽  
Developed Markets ◽  
Accounting Comparability ◽  
The Impact

This paper examined whether financial statement comparability constrains opportunistic earnings management in frontier market countries. Using a large sample of 19 frontier market countries, and an accounting comparability method that maps comparability across several accounting standards, the results show that enhanced financial comparability constrains accruals earnings management (AEM). Contrary to developed markets and novel to this study, a significant relationship between financial comparability and real earnings management (REM) was not found. For greater robustness, AEM and REM were also tested on both International Financial Reporting Standards (IFRS) adopting and non-adopting countries. The results suggest IFRS adoption constrains AEM, yet exhibited no impact on constraining REM. Additionally, the use of BigN auditors failed to conclusively show an ability to moderate EM. When combined, the results suggest that frontier markets engage in less REM than expected. It is also noted that the legal roots (civil vs. common law) play a significant role in constraining earnings management. Common law countries exhibited lower AEM when comparability increased; this significance was not found in countries that were rooted in civil law. Contributions from this study show that findings from developed markets cannot be generalised to frontier markets.

Integrating AIS and Accounting for Income Taxes: From Calculation to Disclosure

2010 ◽  
Vol 25 (3) ◽  
pp. 583-597 ◽  
Author(s):  
Tina M. Loraas ◽  
Kimberly Galligan Key
Keyword(s):  
Control Problem ◽  
Internal Control ◽  
Word Processing ◽  
Internal Controls ◽  
Income Taxes ◽  
Online Retailer ◽  
Organic Foods ◽  
And Control ◽  
Accounting For Income Taxes

ABSTRACT: TK Foods, Inc. is a leading online retailer of whole and organic foods, and while this company is doing well, management is struggling with accounting for income taxes. The case requires you to take the role of a consultant who has been hired to calculate the provision of income taxes and to create a template for the footnote disclosure using spreadsheet and word processing tools. Further, TK requires documentation regarding both the process and internal controls surrounding this calculation. This case will further your understanding of accounting for income taxes, expose you to a significant internal control problem faced by many corporations, and develop your spreadsheet skills from both computational and control standpoints.

scholarly journals ELEMENTS OF ACCOUNTING POLICY SELECTION AND ITS INFLUENCE ON FINANCIAL STATEMENTS INDICATORS

2019 ◽  
pp. 158-162
Author(s):  
O. Ageeva ◽  
D. Formusatii
Keyword(s):  
Financial Analysis ◽  
Financial Statements ◽  
Financial Statement ◽  
Sources Of Information ◽  
Management Decisions ◽  
Financial Analyst ◽  
Valuation Methods ◽  
Policy Selection ◽  
The Impact ◽  
Accounting Policy

In this article, the authors consider reasons for development of variety of accounting policies and examine influencing of selected accounting policy elements on valuation of financial statements indicators. Obviously financial statements indicators are definitely one of the most important sources of information for financial analysis and management decisions. Financial analyst should be aware, which valuation methods have been presented in this financial statement, and how they influence on formulated by him analytical conclusions. The approach presented in the article to the assessment of the impact of accounting policies on the financial statements’ indicators and the conclusions formulated by the authors as a result of the research allows to get answers to these issues.

scholarly journals Faktor-faktor yang Memengaruhi Kualitas Laporan Keuangan Pemerintah Daerah di Kabupaten Banyuasin dengan Sistem Pengendalian Internal Pemerintah sebagai Variabel Moderasi

2019 ◽  
Vol 10 (1) ◽  
pp. 55
Author(s):  
Reny Aziatul Pebriani
Keyword(s):  
Control System ◽  
Local Government ◽  
Internal Control ◽  
Accounting Standards ◽  
Internal Audit ◽  
Financial Statement ◽  
Government Accounting ◽  
Internal Control System

<p align="center"><strong>ABSTRACT</strong></p><p><em>The aim of this study is to determine and analyse the effect of human resource competence, utilization of information technology, the implementation of government accounting standards, the role of internal audit on the quality of local government financial statement and its effect on regional work unit that is moderated by government internal control system in Banyuasin. The method used is descriptive and explanatory survey using 108 respondents. The data analysis method used in this study is multiple regression analysis and the moderating effect is tested using </em><em>Moderated Regression Analysis through </em><em>SPSS 23.</em><em> The results show that human resource competence, </em><em>utilization of information technology, the implementation of government accounting standards, the role of internal audit have simultaneous and significant effect on the quality of local government financial statement. However, when it is tested partially, the implementation of government accounting standards is found to be insignificant. Furthermore, the role of internal that is moderated by government internal control system does not have significant effect on the quality of local government financial statement. The results indicate that to improve the quality of local government financial statement, continues improvement on government internal control system is needed. the government needs to improve the quality of internal audit to improve the role of supervision, coaching, monitoring, and review of financial statements so as to be able to work professionally, objectively and independently.</em></p><p><strong><em>Keywords </em></strong><em>: Human resource competence, utilization of information technology, government internal control system, Government financial statement quality.</em></p><p align="center"><strong>ABSTRAK</strong></p><p><em>Tujuan dari penelitian ini adalah untuk mengetahui dan menganalisis besarnya pengaruh kompetensi SDM, pemanfaatan TI, penerapan SAP, peran Audit Internal secara parsial maupun bersama-sama terhadap </em><em>kualitas </em><em>LKPD </em><em>dan pengaruh</em><em>nya yang dimoderasi oleh SPIP pada </em><em>O</em><em>rganisasi </em><em>P</em><em>erangkat </em><em>D</em><em>aerah (OPD)</em><em> </em><em>Kabupaten Banyuasin. </em><em>Metode yang digunakan  adalah metode deskriptif dan survey eksplanatori dengan ukuran sampel </em><em>1</em><em>08</em><em> responden. Metode analisis data yang digunakan yaitu Regresi Linier Berganda dengan pengujian variabel moderasi menggunakan MRA (Moderated Regression Analysis) dan pengolahan data </em><em>menggunakan software SPSS 23.</em><em> Hasil penelitian ini membuktikan bahwa </em><em>kompetensi SDM, pemanfaatan TI, penerapan SAP, peran Audit Internal</em><em> secara bersama-sama berpengaruh dan signifikan terhadap </em><em>kualitas LKPD</em><em>, namun secara parsial penerapan SAP tidak berpengaruh secara signifikan</em><em>. Kemudian secara moderasi variabel peran audit internal yang dimoderasi oleh SPIP tidak berpengaruh signifikan terhadap kualitas LKPD. Kesimpulan penelitian ini berhasil menemukan bahwa untuk meningkatkan kualitas LKPD </em><em>studi kasus pada OPD di Kabupaten Banyuasin</em><em>, diperlukan upaya perbaikan dan peningkatan secara berkelanjutan terhadap SPIP dalam rangka mempertahankan dan meningkatkan kualitas LKPD, pemerintah perlu meningkatkan kualitas audit internal guna meningkatkan peran pengawasan, pembinaan, pemantauan, dan reviu laporan keuangan sehingga mampu bekerja secara profesional, obyektif dan independen.</em></p><strong><em>Kata kunci</em></strong><em> : Kompetensi SDM, Pemanfaatan TI, SPIP, Kualitas LKPD</em>

Rules-Based Accounting Standards and SEC Enforcement

2020 ◽  
Vol 27 (2) ◽  
pp. 101
Author(s):  
Devon Baranek
Keyword(s):  
Multivariate Analysis ◽  
Opposite Effect ◽  
Accounting Standards ◽  
Financial Statement ◽  
Enforcement Action ◽  
Two Samples ◽  
The Impact ◽  
Archival Study

This archival study investigates the association between rules-based violations and the likelihood of SEC enforcement. I utilize two samples of firms subject to SEC investigations: 1) firms with investigations that end in an enforcement action and 2) firms with investigations that are dropped, and examine the impact of rules-based accounting violations on enforcement. Each enforcement action in the sample specifically cites the GAAP standard violated, and the degree to which the standards contain rules-based characteristics is quantified. The violations are classified as either rules-based or principles-based and a multivariate analysis is performed. The “roadmap” theory suggests that firms who commit rules-based violations are more likely to be subject to SEC enforcement, while the “roadblock” theory predicts the opposite effect. Overall, the results suggest the SEC is less likely to litigate cases that involve rules-based accounting violations, or more likely to drop/dismiss investigations centered on rules-based violations, consistent with the “roadblock” theory. No evidence is found of a relation between rules-based accounting violations and the dollar magnitude of penalties assessed. These results are relevant for financial statement preparers, auditors, and regulators.

FASB and IASB diverging perspectives on the new lessee accounting

2016 ◽  
Vol 12 (2) ◽  
pp. 161-176 ◽  
Author(s):  
Judy Kay Beckman
Keyword(s):  
Financial Statement ◽  
Sufficient Information ◽  
Content Type ◽  
Return On Equity ◽  
Current Topic ◽  
Income Statement ◽  
Accounting Changes ◽  
The Impact ◽  
Us Gaap

Purpose – The purpose of this paper is to demonstrate the expected effect of diverging accounting requirements and practices on firms in two industries – construction and retailing – which typically undertake different types of leases, namely, equipment and real estate, respectively. The paper also discusses how the new standards will provide expanded disclosures to aid this financial statement analysis. Design/methodology/approach – The research demonstrates how to estimate information comparable to that produced under IFRS from US GAAP financial statements and estimates the significance of the impact on key financial statement ratios. Findings – Key profitability ratios – return on assets and return on equity – generally improve over the time period 2007-2013 while interest coverage drastically deteriorates particularly for retailing firms. This finding contrasts with what some view as the Financial Accounting Standards Board’s reason for its choice of income statement presentation – to avoid the front-end loading of costs that ensues from accounting for leases as one would any other long-lived asset acquired through long-term financing. Practical implications – Current IFRS and US GAAP requirements do not provide sufficient information to estimate lease accounting changes for those firms which have no long-term debt other than long-term leases. Therefore, the estimates presented in this analysis are limited below what will be possible to do under new accounting requirements. Originality/value – The research covers a current topic of new divergence between US GAAP and IFRS requirements for leases. In addition, improvements over analysis techniques currently required that will be possible with new financial statement disclosures also are discussed.

scholarly journals Rules-Based Accounting Standards and SEC Enforcement

2020 ◽  
Vol 27 (1) ◽  
pp. 101
Author(s):  
Devon Baranek
Keyword(s):  
Multivariate Analysis ◽  
Opposite Effect ◽  
Accounting Standards ◽  
Financial Statement ◽  
Enforcement Action ◽  
Two Samples ◽  
The Impact ◽  
Archival Study

This archival study investigates the association between rules-based violations and the likelihood of SEC enforcement.  I utilize two samples of firms subject to SEC investigations: 1) firms with investigations that end in an enforcement action and 2) firms with investigations that are dropped, and examine the impact of rules-based accounting violations on enforcement.  Each enforcement action in the sample specifically cites the GAAP standard violated, and the degree to which the standards contain rules-based characteristics is quantified.  The violations are classified as either rules-based or principles-based and a multivariate analysis is performed.  The “roadmap” theory suggests that firms who commit rules-based violations are more likely to be subject to SEC enforcement, while the “roadblock” theory predicts the opposite effect.    Overall, the results suggest the SEC is less likely to litigate cases that involve rules-based accounting violations, or more likely to drop/dismiss investigations centered on rules-based violations, consistent with the “roadblock” theory.  No evidence is found of a relation between rules-based accounting violations and the dollar magnitude of penalties assessed.  These results are relevant for financial statement preparers, auditors, and regulators. 

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