Tax accounting principles and corporate risk-taking

We analyze the role of business taxation for corporate risk-taking under different accounting principles (such as mark-to-market, lower-of-cost-or-market and historical cost). We demonstrate that conservative accounting may imply incentives to overinvest in risky assets. However, with imperfect loss offsets, the mark-to-market principle penalizes risky investment whereas more conservative accounting leaves the risk choice unaffected.

MoreLess

Year of publication:	2014
Authors:	Becker, Johannes ; Steinhoff, Melanie
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 125.2014, 1, p. 79-81
Publisher:	Elsevier
Subject:	Accounting principles \| Risk-taking \| Business taxation \| Corporate investment

Online Resource

Check full text access |

More access options

Check Google Scholar

In libraries world-wide (WorldCat)

In German libraries (KVK)

subito order

I need help

More details

Type of publication:	Article
Classification:	H25 - Business Taxes and Subsidies ; M41 - Accounting
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010939494