Tax abatement reporting: Perspectives of users and preparers

Harris, James A.; McKenzie, Karen; Rentfro, Randall

doi:10.1108/jpbafm-26-03-2014-b003

Cited by 3 publications

(4 citation statements)

References 7 publications

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“…Additionally, abatements may be inconsistently measured, thereby undermining the advantage of standardized reporting. Moreover, locating the abatement data in the financial notes may not result in the information reaching some of the target population, most notably citizens and policymakers (Harris, McKenzie, & Rentfro, 2014). Perhaps most importantly, GASB's implemented accrual-based accounting approach does not go far enough in reporting the full committed cost of abatements.…”

Section: Discussionmentioning

confidence: 99%

“…Moreover, a recent survey reveals that a range of CAFR users would prefer abatement information being treated as an expenditure line-item rather than as an addendum in financial notes (Harris, McKenzie, & Rentfro, 2014). Without a line-item enumeration, it is unclear if investors and creditors would use the disclosures to assess the government's financial condition in a way that would influence bond ratings, for instance.…”

Section: Accounting Of Foregone Revenuementioning

confidence: 99%

“…Tax abatement data for any given reporting period can be disclosed by individual recipient, by program, or by geography, for example. Harris, McKenzie, and Rentfro (2014) discovered that citizens find individual-level disclosure more important than did public officials. However, because the data are to appear in the financial notes, GASB acknowledges that disclosure at the recipient level may overwhelm the reader with detail to the point of diminished understandability.…”

Section: Level Of Disclosure Detailmentioning

confidence: 99%

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Towards enhancing tax abatement transparency: Reviewing the promises and limitations of GASB 77

Propheter

2017

Journal of Public Budgeting, Accounting &Amp; Financial Management

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In August 2015, the Government Accounting Standards Board (GASB) adopted Statement 77, requiring government disclosure in audited financial reports of a particular type of tax expenditure, tax abatements. GASB's reporting standards move tax abatements from a budgetary environment to an accounting environment. This paper evaluates GASB 77's provisions to encourage an early and on-going dialogue about the Statement's prospects for achieving greater transparency compared to existing tax expenditure reporting efforts. We conclude that GASB 77 will be most beneficial to consumers of financial information in medium and large jurisdictions where there is no alternative tax abatement disclosure platform, or where the alternative offers less transparency than what can be achieved through financial reporting.

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Section: Discussionmentioning

confidence: 99%

Section: Accounting Of Foregone Revenuementioning

confidence: 99%

Section: Level Of Disclosure Detailmentioning

confidence: 99%

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Towards enhancing tax abatement transparency: Reviewing the promises and limitations of GASB 77

Propheter

2017

Journal of Public Budgeting, Accounting &Amp; Financial Management

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“…Property tax abatement is a full or partial reduction in the normal property tax liability owed to governmental taxing authorities (Wassmer, 2014). The potential benefits of tax abatements are to enhance economic development (Harris et al, 2014). This disclosure recognition is effective for financial reporting periods beginning after December 2015 and should provide greater transparency about the nature and magnitude of tax abatements.…”

Section: Tax Abatementmentioning

confidence: 99%

Governmental Financial Statement Note Disclosures and Analysis of Texas Public Two-Year Colleges’ Reporting

2019

JAF

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requires state and local governments, public colleges and universities, and other governmental entities to issue basic financial statements, management's discussion and analysis, and required supplementary information (GASB 34, 1999a, 6). The notes to the financial statements are an integral part of the basic financial statements and consist of disclosures about the governmental entity. The notes provide qualitative and quantitative information to help financial statement users better understand the numbers on the face of the financial statements. This study investigates Texas two-year college 2014 financial statements to determine the extent of note disclosures and compliance with the Texas Higher Education Coordinating Board (THECB) requirements. The investigation also seeks to determine if a difference in compliance and disclosure exists between the financial statements audited by local, regional, or national accounting firms and finds that types of disclosure and auditor together with size, revenue, enrollment, tuition and state appropriate explain the number of required note disclosures, additional note disclosures and policy disclosures.

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Should Government Assistance be Reflected in Financial Reports?

Desir

Pfeiffer

Roberts

2019

Accounting Horizons

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SYNOPSIS Government assistance provided to U.S. companies is a large and economically significant phenomenon. Although the Financial Accounting Standards Board (FASB) has a current project concerning government assistance, U.S. Generally Accepted Accounting Principles (GAAP) do not yet provide guidance about financial reporting for assistance. We explore whether recipients of government assistance should reflect it in financial reports. Specifically, we synthesize arguments and evidence from several sources, including conceptual framework element definitions and recognition criteria, current practice, IFRS guidance and practice, written arguments from FASB constituents, and guidance from professional service firms. We conclude that U.S. GAAP should require both the recognition of assets, liabilities, and changes in equity stemming from assistance agreements with government entities and the disclosure of relevant details to help users understand the measurement, timing, and uncertainty of the benefits and costs of agreements. We discuss implementation challenges and suggest avenues to improve financial reporting for government assistance. JEL Classifications: M41; M48; H81. Data Availability: All data are from public sources identified in the manuscript.

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Tax abatement reporting: Perspectives of users and preparers

Cited by 3 publications

References 7 publications

Towards enhancing tax abatement transparency: Reviewing the promises and limitations of GASB 77

Towards enhancing tax abatement transparency: Reviewing the promises and limitations of GASB 77

Governmental Financial Statement Note Disclosures and Analysis of Texas Public Two-Year Colleges’ Reporting

Should Government Assistance be Reflected in Financial Reports?

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