The Experts below are selected from a list of 2031 Experts worldwide ranked by ideXlab platform
Peter R. Joos - One of the best experts on this subject based on the ideXlab platform.
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Unrecognized Deferred Taxes: Evidence from the U.K.
The Accounting Review, 2004Co-Authors: Elizabeth A. Gordon, Peter R. JoosAbstract:We examine whether U.K. managers use the flexibility provided under the partial method for Deferred Taxes to measure unrecognized Deferred Taxes opportunistically. We first test whether firm‐specific operational and opportunistic factors are associated with the level of unrecognized Deferred Taxes. The tests provide evidence certain U.K. managers opportunistically measure Deferred Taxes to manage leverage, consistent with arguments by commentators that Deferred Taxes heavily influence leverage indicators that play a prominent role in the U.K. contracting framework. Because the proper identification and measurement of both operational and opportunistic determinants of unrecognized Deferred Taxes influence our tests, we additionally investigate whether unrecognized Taxes relate to future Deferred tax reversals and future operating profitability of the firm. These tests show the components of Deferred Taxes predict both future Deferred tax reversals and indicators of future profitability of the firm as predi...
A. Seetharaman - One of the best experts on this subject based on the ideXlab platform.
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Incremental Value Relevance of Unrecognized Deferred Taxes: Evidence from the United Kingdom
Journal of the American Taxation Association, 2008Co-Authors: Stephen Gregory Lynn, Chandra Seethamraju, A. SeetharamanAbstract:ABSTRACT: We examine empirically whether the use of the partial method for Deferred Taxes provides incremental information of use to investors. Specifically, we test whether U.K. capital markets valued unrecognized Deferred tax amounts reported in the footnotes to U.K. annual reports, pursuant to U.K. Statement of Standard Accounting Practice (SSAP) No. 15 (ASB 1985). Our empirical model is based on Feltham and Ohlson (1995). We run iterative weighted least-squares (IWLS) regression of year-end share prices on a decomposition of book value per share for a pooled sample of U.K. firm-years drawn from the years 1993 through 1998, and find positive associations with price for net Deferred tax assets—both recognized and unrecognized. Moreover, we are unable to reject the null hypothesis that both parts of Deferred Taxes have similar multiples in our price regressions. These findings support some theoretical predictions in Sansing (1998), Guenther and Sansing (2000, 2004), and Amir et al. (2001).
Elizabeth A. Gordon - One of the best experts on this subject based on the ideXlab platform.
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Unrecognized Deferred Taxes: Evidence from the U.K.
The Accounting Review, 2004Co-Authors: Elizabeth A. Gordon, Peter R. JoosAbstract:We examine whether U.K. managers use the flexibility provided under the partial method for Deferred Taxes to measure unrecognized Deferred Taxes opportunistically. We first test whether firm‐specific operational and opportunistic factors are associated with the level of unrecognized Deferred Taxes. The tests provide evidence certain U.K. managers opportunistically measure Deferred Taxes to manage leverage, consistent with arguments by commentators that Deferred Taxes heavily influence leverage indicators that play a prominent role in the U.K. contracting framework. Because the proper identification and measurement of both operational and opportunistic determinants of unrecognized Deferred Taxes influence our tests, we additionally investigate whether unrecognized Taxes relate to future Deferred tax reversals and future operating profitability of the firm. These tests show the components of Deferred Taxes predict both future Deferred tax reversals and indicators of future profitability of the firm as predi...
David P Weber - One of the best experts on this subject based on the ideXlab platform.
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discussion of incremental value relevance of unrecognized Deferred Taxes evidence from the united kingdom
Journal of The American Taxation Association, 2008Co-Authors: David P WeberAbstract:INTRODUCTION Lynn et al. 2007 hereafter LSS investigate whether the market value of Deferred Taxes is ffected by the expected timing of their reversal. To provide empirical evidence on this issue, LSS nalyze a sample of U.K. firms from the 1990s, when U.K. GAAP mandated the partial provision ethod of accounting for Deferred Taxes. The partial provision method prescribes that only the eferred Taxes that are expected to reverse in the foreseeable future are recognized. Deferred Taxes ot meeting this description are subject only to footnote disclosure. In this context LSS pursue two pecific research questions: 1 Does the market assign a nonzero value to the unrecognized ortion of Deferred Taxes? 2 Does the market assign different values to the recognized and nrecognized portions of Deferred Taxes? Their empirical tests yield results that the authors interret as providing answers of “yes” to the first research question and “no” to the second. They onclude that these findings support the prediction from recent theoretical papers that the value of eferred Taxes should not be affected by the timing of their reversal. In my opinion, LSS undertake a useful endeavor to provide empirical evidence on an issue hat has been the subject of some recent debate in both academic and standard-setting circles. urther, this issue is important not only to the academic tax community, but also to those academcs and practitioners interested in financial reporting and valuation issues more generally. Thus, I elieve that this type of work has the potential to appeal to a broad audience. My comments in this discussion follow two basic themes. First, I reexamine the links between he LSS research setting and the related theoretical literature. This process leads to the observation hat existing theory is much richer in terms of providing testable hypotheses than what LSS ctually pursue. I discuss the implications of this point for both LSS and future research in this rea. Second, I offer some perspectives on a few of the authors’ key research design choices that ay be important for interpreting their results. I close with some thoughts on possible avenues for uture research.
Hans-joachim Zwiesler - One of the best experts on this subject based on the ideXlab platform.
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Allowance for surplus funds under Solvency II: adequate reflection of risk sharing between policyholders and shareholders in a risk-based solvency framework?
European Actuarial Journal, 2017Co-Authors: Tobias Burkhart, Andreas Reuß, Hans-joachim ZwieslerAbstract:In several member states of the European Union, collective bonus reserves are set up as part of the statutory reserves backing traditional participating life insurance business. Although primarily reserved for policyholders’ future surplus participation, national law (for example in Germany and Austria) allows the insurance companies to use these funds to (partly) cover future losses. Under the risk-based solvency framework Solvency II, the loss absorbency of these buffer reserves is explicitly recognized by so-called surplus funds which are classified as Basic Own Funds. This paper performs a profound analysis of the approach currently used in Germany to reflect this type of risk sharing between policyholders and shareholders in the Solvency II framework. The comprehensive methodology developed in this paper can be used to determine the economic value of surplus funds and ensures that no double-counting of future cash flows occurs. It can easily be adapted to other countries, in particular Austria. Based on a stochastic balance sheet and cash flow projection model, we present numerical results that illustrate how the allowance for Surplus Funds affects Basic Own Funds, Solvency Capital Requirement, Risk Margin and Deferred Taxes under Solvency II. We conclude that the current valuation approach appears to be internally consistent, but some of the underlying assumptions are questionable. In particular, the valuation approach should be refined in order to better reflect local statutory requirements, including both, accounting rules and other regulatory constraints for participating business.
