Accounting Commons^™

Who Benefits From Detailed Income Tax Disclosure?, Jack Badger

Doctoral Dissertations

In this study, I investigate the costs and benefits of providing detailed income tax footnotes. Specifically, I examine whether the level of specificity in a firm’s income tax footnote is associated with the value relevance of income tax numbers, analysts’ effective tax rate (ETR) forecasting ability, and uncertain tax benefit (UTB) settlements. The Financial Accounting Standards Board (FASB) launched, and finalized, the Income Tax Disclosure Project to address concerns regarding the amount of boilerplate and generic information in firm’s income tax footnotes. Firms argue that the complex and dynamic nature of income taxes will render these disclosures confusing for investors …