The use of assumed tax rates to adjust special items (e.g., restructuring charges, asset writedowns, etc.) is common in empirical accounting research, as these items are reported pre-tax and are often used in research designs that include after-tax earnings. This study aims to explore the...

Burgstahler et al. (2002) evaluate special items, a component of earnings with time series properties that differ from recurring earnings, to determine whether the market correctly prices these transitory items. In addition, they investigate the implications of special items for future earnings...