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The Effect of Additional 10% Surtax on Undistributed Retained Earnings upon the Firm's Early Adoption of SFAS No. 35
Asset impairments;Early adoption;10% surtax on undistributed retained earnings
|Issue Date: ||2013-07-15T04:05:27Z
|Publisher: ||政治大學商學院會計系; 財團法人李先庚會計文教基金會|
The purpose of this study is to examine the association between additional 10% surtax on undistributed retained earnings and the likelihood of firm's early adoption of SFAS No. 35, Accounting for Asset Impairments. The data set contains 295 observations with 90 early adoptions and 205 timely adoptions. The result shows that the larger burden of additional 10% surtax on undistributed retained earnings, the lower likelihood of the firm adopting SFAS No. 35 early. In other words, the additional 10% surtax on undistributed retained earnings is based on taxable income. Under the current cash-basis-oriented tax rules, asset impairment loss is regarded as an unrealized loss and thus cannot be used as a deductible item in the computation of taxable income. Consequently, the undistributed retained earnings is increased nominally and a firm will be levied more 10% surtax under the integrated income tax system. Therefore, the likelihood of a firm adopting early SFAS No. 35 decreases.
|Relation: ||會計評論, 47: 61-88|
|Appears in Collections:||[會計學系] 期刊論文|
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