United States multinational corporations can delay financial statement recognition of U.S. taxes on repatriations by designating foreign subsidiary earnings as quot;permanently reinvestedquot; under APB Opinion No. 23. This paper examines 1) whether firms use the permanently reinvested earnings...

As shown in the international business literature, the ability of controlling owners to extract private benefits is greater in countries with weaker legal institutions. In these countries, providing credible financial information could play an especially important role in reducing information...

This study hypothesizes and tests whether the degrees to which managers exercise earnings discretion relates to their value system (i.e., culture) as well as the institutional features (i.e., legal environment) of their country. We find that uncertainty avoidance and individualism dimensions of...

We examine whether UK managers use the flexibility provided under the partial method for deferred taxes to measure unrecognized deferred taxes opportunistically. We first test whether firm-specific operational and opportunistic factors are associated with the level of unrecognized deferred...

I use market-based measures to investigate the perceived reliability of fair value amounts reported in bank financial statements. Fair values as a measurement basis in accounting are becoming more predominant. This growth increasingly requires fair value estimation. I develop a hypothesis based...

In the last years banks and firms relationship in Italy has experienced deep changes due to a new revised national and international regulation and to an increasing globalization of economic environment. These evolutions imply a new bank-firm relationship with a deeper disclosure, in a...

There are differences in how Freddie Mac's and Fannie Mae's accounting regimes account for their mortgage guarantee activity - an important part of their business. This diversity results from the accounting choices provided by the relevant, complex accounting guidance as well as differences in...

The Financial Accounting Standards Board (FASB) recently issued Statement No. 156 - Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140 (SFAS 156) which requires, if servicing assets and liabilities are separately recognized, their initial measurement at fair...

The purpose of the Allowance for Loan Losses (Allowance) is to adjust gross loans for credit quality. Prior research has given conflicting evidence on whether Bank Holding Companies (BHCs) manage earnings through the Allowance. This paper reveals findings from a two stage regression for all BHCs...

Performance pricing links the interest rate spread on bank debt to a borrower's performance via two options. It gives borrowers an option to reduce interest rates if credit quality improves, and it gives lenders an option to receive higher interest rates if credit quality deteriorates. Contracts...