Environmental regulation and corporate tax avoidance—Evidence from China

In this study, we used a difference-in-difference (DID) approach to analyze the effect of environmental regulation on corporate tax avoidance behavior based on China’s carbon emissions trading pilot policy of 2013. Our findings were as follows: (1) Environmental regulation has led companies to adopt further tax evasion behaviors. Furthermore, the core conclusion was confirmed after a series of robust and endogenous tests, such as parallel trends and PSM-DID (propensity score matching-difference-in-difference). (2) Environmental regulations increase tax avoidance activities by reducing corporate cash flows. (3) The influence of environmental regulation on firm tax evasion is highly pronounced among non-state-owned enterprises, big-scale enterprises, and enterprises with a high degree of industry competition.

Unregulated Corporate Financial Disclosure and Analysts’ Forecast Properties: The Case of Embedded Value Reporting by Life Insurers

This paper investigates the association between life insurers’ voluntary disclosure of embedded value (EV), an unregulated market-driven fair value measure, and analyst forecast accuracy and dispersion. EV is an estimate of the present value of future net cash flows from in-force life insurance business. Advocates of this disclosure believe that EV is a better measure of economic performance than traditional GAAP measures. Others argue that corporate management has discretion in estimating and reporting EV. Further, analysts may have access to information that allows the development of possibly more accurate estimation metrics in the absence of EV disclosure. It is then an empirical issue to determine whether EV disclosure has any incremental effect on analysts’ forecast properties. Using a multi-country setting, we find that EV disclosure is positively associated with analysts’ earnings forecast accuracy and negatively related to forecast dispersion. This result is consistent with the alternative hypothesis that disclosure of EV provides a richer information set that enriches analysts’ forecasts beyond their own in-house developed surrogates. As guidance for insurance accounting and disclosure evolves, our findings support the value of continuing to provide EV information to the public.

Anti–crisis Mechanisms of Qatar: Economic Diversification, Digitalization, Transformation

The Qatar National Vision 2030 program is based on two principles — modernization and preservation of traditions. Blockade of the country in 2017–2020 and the coronavirus pandemic became a serious test for the economy of Qatar, but the government and residents of the country do not consider themselves defeated by these circumstances, but on the contrary, these circumstances helped the country’s economy to survive the above crises. In 2019, the International Monetary Fund said that Qatar’s economy was resilient in the face of the blockade and shocks caused, including by the fall in hydrocarbon prices in 2014–2016. The events of the global economic crisis caused by the pandemic have posed another challenge to the financial and banking system of Qatar. Thanks to the measures of the country’s government aimed at ensuring business continuity, maintaining liquidity and providing support to the sectors of the economy affected by the pandemic, it was possible to mitigate the impact of this shock, support cash flows, and achieve financial and banking stability in the country. However, according to fund analysts, COVID–19 and a sharp drop in hydrocarbon revenues will lead to a reduction in real GDP growth by 2% in 2020. At the same time, future profits from hosting the FIFA World Cup in 2022, continued expansion of capacities in production of liquefied gas and competent fiscal and monetary policy will contribute to economic growth in the country in the medium term.

Getting the valuation formulas right when it comes to annuities

PurposeThe purpose of this paper is to establish the flow-to-equity method, the free cash flow (FCF) method, the adjusted present value method and the relationships between these methods when the FCF appears as an annuity. More specifically, we depart from the two most widely used evaluation settings. The first setting is that of Modigliani and Miller who based their analysis on a stationary FCF. The second setting is that of Miles and Ezzell who worked with an FCF that represents an autoregressive possess of first order.Design/methodology/approachInspired by recent observations in the literature concerning cash flows, discount rates and values in discounted cash flow (DCF) methods, we mathematically derive DCF valuation formulas for annuities.FindingsThe following relationships are established: (a) the correct discount rate of the tax shield when the free cash flow takes the form of a first-order autoregressive annuity, (b) the direct valuation of the tax shield from the free cash flow for a first-order autoregressive annuity, (c) the correct translation from the required return on unlevered equity to the levered equity, when the free cash flow is a stationary annuity and (d) direct calculation of the unlevered and levered firm values and the value of the tax shield for a stationary annuity.Originality/valueUntil now the complete set of formulas for the valuation of stochastic annuities by different DCF methods has not been established in the literature. These formulas are developed here. These formulas are important for practitioners and academics when it comes to the valuation of cash flows of finite lifetime.

Resilience of the Hotel Industry in COVID-19

COVID-19 has resulted in restrictions on travelling and public get-togethers. Amid the pandemic, one of the industries to be the most severely affected is the hotel industry. In the post-covid period, the industry is struggling for its subsistence due to mounting debts, change in behavior and perception of consumers, and lack of cash flows. This has resulted in loss of employment and has also negatively impacted allied industries. However, hotel entrepreneurs have shown resilience amid the crisis and have begun to explore novel opportunities. Hotels have adopted innovative technological and digital ways to satisfy the needs of the consumers for a contactless experience. The objective of this chapter is to explore the responses of the Indian hotel industry to the pandemic and risks associated with it. It explores the new paradigm and challenges for the industry and explains the resultant new trends in the hotel industry. The emphasis is on the exploration of long-term recovery and resilience of the hotel industry in India along with the policy measures and implications for the hotel industry.

Standard Jones and Modified Jones: An Earnings Management Tutorial

ABSTRACT Context: measurement of earnings management usually requires multi-step models for computation. After examining the literature through bibliometrics studies, literature review, and research databases, we found that the Standard Jones model and its subsequent modifications are those that have more prominent use. Much of this research is potentially interesting for business theories related to earnings quality and accounting manipulation; however, it is difficult to be understood by junior researchers and practitioners, because they are not clearly described in the literature or the steps may be easy to confuse. Objective: in this tutorial, we present several key concepts about earnings management and explain, step by step, how to measure it. Method: our tutorial considers measurement using the following models: Standard Jones, Modified Jones, Modified Jones with return on assets (ROA), and Modified Jones using Cash Flows and Accruals Reversals. Conclusions: our main contribution with this tutorial is to provide a step-by-step guide for future studies, so that they can be more comparable with each other when using measurement methods of earnings management.

The Effect of the COVID-19 Pandemic on International Stock Exchanges

It is possible to define the concept of risk in various ways. Risk is the deviation possibility of the realized value from the expected value. It has two components, nonsystematic risk and systematic risk. Despite this, pandemics are risk factors that cannot be anticipated. They have deeply affected economies and financial markets under every condition. The importance of the detection of the COVID-19 pandemic comes from the selection of monetary and fiscal policies to be applied by governments during the rehabilitation process of economies. Equity share markets provide important information regarding the future of a company or economy. The reason for this is that the current value of an equity share is dependent on the deducted calculation of the cash flows of the equity share to be provided in the future. The actual price of the equity share is determined according to supply and demand under market conditions.

Penyajian Laporan Keuangan Entitas Berorientasi Non Laba Berdasarkan ISAK 35 Pada Gereja HKBP Km 55

This journal discusses the presentation of financial statements on non-profit entities. Initially, non-profit entities presented financial statements based on PSAK 45 which was later changed to ISAK 35. One of the non-profit entities included in the church, the most important aspect of which was financial accountability. Good accountability is obtained from generally accepted accounting standards.The purpose of this journal is to find out the presentation of financial statements based on the implementation of ISAK 35 which began on January 1, 2020. The object of this paper is the presentation of the financial statements of the HKBP KM 55 Church. The data were collected through a series of interviews and observations. The financial statements that will be produced are statements of financial position, statements of comprehensive income, statements of cash flows and notes to financial statements.Keywords : ISAK 35, Non-Profit Entities,Financial Report