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Full-Text Articles in Business
Acquired In-Process Research Development And Earnings Management, Daniel Gyung Paik, Junyoup Lee, Eun Suh Lee, Kevin H. Kim
Acquired In-Process Research Development And Earnings Management, Daniel Gyung Paik, Junyoup Lee, Eun Suh Lee, Kevin H. Kim
Accounting Faculty Publications
New accounting standards, namely SFAS 141 and 142, were adopted in 2001. The release of these two regulations offers a unique opportunity to explore how managers have changed their earnings manipulation behavior by using IPR&D costs. In this study, we examine whether and how the amount of IPR&D at the acquisition deals is associated with discretionary accruals, which serve as a proxy for earnings management. We use a sample of firms reporting acquired IPR&D over the period of 1993 to 2007 with a matched group based on size and industry. Our results provide evidence that managers strategically use the IPR&D …
Stock Repurchases As The Earnings Management: An Unintended Consequence Of The 2003 Dividend Tax Cut, Xiang Gao
Stock Repurchases As The Earnings Management: An Unintended Consequence Of The 2003 Dividend Tax Cut, Xiang Gao
Open Access Theses & Dissertations
I examine the impact of the 2003 dividend tax cut (Jobs and Growth Tax Relief Reconciliation Act, JGTRRA) on firms using stock repurchases for earnings per share (EPS) manipulation. Prior to 2003, dividends were taxed at the individual's income tax rate, which usually was ranged from 28 percent to 50 percent, compared to 20 percent tax rate on capital gains. In May 2003, with the passage of the JGTRRA, the dividend tax was cut significantly to 15 percent for the majority of individual income tax brackets, which is equal to the tax rate of capital gain. Consistent with Blouin et …