LIFO abandonment

Article Abstract:

Research examines the abandonment of last-in first-out (LIFO) inventory costing by 87 firms between 1950 and 1983. The abandonment of LIFO can have significant tax costs including tax levied on the restoration of the LIFO reserve, and the cost of forgone future tax benefits. The abandonment of LIFO can reduce the likelihood of technical default because the financial statements adjustments that go along with abandonment can relax loan agreement restrictions. The trade-off between these two incentives is examined.

Management, Accounting and auditing, Accounting, Inventory control

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Firms' off-balance sheet and hybrid debt financing: Evidence from their book-tax reporting differences

Article Abstract:

An attempt is made to match large U.S. corporations' tax returns during 1989-2001 to their financial statements to construct a firm-level proxy of firms' use of off-balance sheet and hybrid debt financing. It was found that firms with less favorable prior period Standard & Poor's (S&P) bond ratings or higher leverage ratios in comparison to their industry report greater amounts of interest expense on comparison to their tax returns than to investors and creditors on their financial statements.

United States, Forecasts, trends, outlooks, Taxes, Forecasts and trends, Corporate taxes, Market trend/market analysis, Corporations, Tax policy, Tax returns

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Cross-juristictional income shifting by U.S. multinationals: evidence from international bond offerings

Article Abstract:

Evidence is found that multinational companies issue bonds in the countries where they will experience the best tax and income results.

World, Research, Economic aspects, Marketing, International business enterprises, Multinational corporations, Influence, Bonds, Bonds (Securities), Tax deductions, Location, Income, Foreign tax credit, Tax incentives

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