Trends in Book-Tax Income and Balance Sheet Differences

34 Pages Posted: 24 May 2002

See all articles by Lillian F. Mills

Lillian F. Mills

University of Texas at Austin - McCombs School of Business

Kaye J. Newberry

University of Arizona - Department of Accounting

William B. Trautman

Internal Revenue Service - LMSB Research East

Multiple version iconThere are 2 versions of this paper

Date Written: June 2002

Abstract

We use Compustat and tax return data to describe trends from 1991-1998 in differences between book and tax measures of income and balance sheet amounts. Our primary findings confirm that book-tax income differences are growing throughout the 1990s. Extending prior work, we partition the sample to describe the differences by industry, global character and profitability. Secondly, we compare Compustat financial statement assets and liabilities to the book balance sheet reported on the tax return and find that the tax return amounts exceed the financial statement amounts in the aggregate. We plan to investigate suggested explanations for this excess, including differences in book versus tax consolidation reporting and off-balance sheet activity.

Keywords: book-tax differences, consolidation, off-balance sheet

JEL Classification: H25, H26, M41, M43

Suggested Citation

Mills, Lillian F. and Newberry, Kaye J. and Trautman, William B., Trends in Book-Tax Income and Balance Sheet Differences (June 2002). Available at SSRN: https://ssrn.com/abstract=313040 or http://dx.doi.org/10.2139/ssrn.313040

Lillian F. Mills (Contact Author)

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

Kaye J. Newberry

University of Arizona - Department of Accounting ( email )

Tucson, AZ 85721
United States
520-621-1252 (Phone)
520-621-3742 (Fax)

William B. Trautman

Internal Revenue Service - LMSB Research East ( email )

One Montvale Avenue
Stoneham, MA 02180
781-835-4096 (Phone)

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