Influence of Rules for Computing Corporate Income Tax on the Accuracy of Financial Statements of Lithuanian Companies

Abstract

Companies in Lithuania have to follow Business Accounting Standards (BAS) when

Financial Information and Management Decisions: Impact of Accounting Policy on Financial Indicators of the Firm

“…The useful life for the same type of asset may vary from several years to tens of years. Companies of accelerated depreciation methods and failure to revalue assets so that they reflect true asset value (Cernius et al 2016). As a result, the value of long-term assets recorded in the balance sheet is understated, thus making the company's financial situation look worse than it is.…”

“…However, even in the context of large companies, there's evidence that such distortions exist. Prior research revealed that companies were using considerable capacities of fully depreciated long-term assets (Cernius et al 2016).…”