Impact of foreign operations on reported effective tax rates: interplay of foreign taxes, U.S. taxes and U.S. GAAP

Work cost impact analysis in FTSE MIB companies

“…In particular, the employee benefits following suspending service allowance have been subject to several studies, which have focused their attention on the "corridor method" Fasshauer et al, 2008) or the transition from "defined benefit plans" to "defined contribution plans" (Swinkels, 2006). However, the existing literature provides no unified vision on the connection between work cost and financial obligations (Marino et al, 2000;Bauman, 2001). Several researchers agree on the temporary effects of financial obligations on work cost, but are divided when it comes to the permanent effects of these (Jackman et al, 1996;Nickell, 1997).…”

Empirical Approach for the US Companies in Dual Perspectives: Effective Tax Rates and the Remuneration of CEO

“…Gupta and Newberry (1997) consider that a ROA increase will lead to an increase in EITR. Phillips (2003), Lee The shareholders of a company appreciate managers who have the ability to reduce the effective tax rate and reward them according to the level of tax burden reduction (Bauman and Schadewald, 2001). According to corporate governance, the new corporate governance code issued to the US in 2013 (see in Appendix) is comprised of the provision according to which the managers remuneration should be paid depending on a package of financial performance indicators which reflect the long-term strategy.…”

The fleeting nature of permanent reinvestment: Accounting for the undistributed earnings of foreign subsidiaries

“…10 HewlettPackard's increase of 22.4% and Altria's decrease of 2.4% highlight the range of the financial reporting consequences to individual firms, with 3.9% and 1.9% representing the mean and median effects on the ETRs of the DJIA firms, respectively. Bauman and Schadewald (2001) note how ETRs significantly impact the analysis of the quality of earnings and cash flows of U.S. companies with foreign operations, and Schmidt (2006) finds that changes in the tax component of ETRs have significant valuation effects as investors incorporate the forecasting implications into stock prices. While it is possible to adjust analyses and forecasts for the impact of repatriating foreign profits earned in prior periods, the effect is difficult to quantify because the total related income tax expense (or benefit) is not commonly disclosed.…”