Actual Tax Earnings - A Re-Assessment
Since April 1973, when the United Kingdom introduced the imputation tax system, investment analysts have had difficulty computing earnings per share. There has been considerable debate surrounding the issues. Now, due to increased United States activity in the United Kingdom stock market, more attention has been given to actual tax earnings. An example is used to illustrate difficulties of imputation, including an ongoing debate centering around nil versus net. The division of groups over a fifty-two per cent tax and actual tax reflects this debate on nil and net. Those attracted to nil support the blanket fifty-two per cent tax. Problems are compounded with inflation adjustments. Gainers and losers are discussed with tables listing the extremes of both groups.
Publication Name: The Accountant
Earnings management to avoid earnings decreases and losses
A study showed that companies manage reported earnings to prevent earnings decreases and losses. In cross-sectional distributions of earnings changes and earnings, it was observed that there are unusually low frequencies of small declines in earnings and small losses and unusually high frequencies of small rises in earnings and small positive income. Two components of earnings, cash flow from operations and changes in working capital, were found to be used for attaining increases in earnings.
Publication Name: The Journal of Accounting and Economics
Unrecorded intangible assets: abnormal earnings and valuation
The usage of the residual income model to check the persistence of abnormal earnings and intangible assets in corporate financial statements is described.
Publication Name: Accounting Horizons
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