Trends in Book-Tax Income and Balance Sheet Differences
Posted: 16 Aug 2002
The authors 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. Their primary findings confirm that book-tax income differences grew throughout the 1990s. Extending prior work, they partition the sample to describe the differences by industry, global character, and profitability. Secondly, they 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. They 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: Suggested Citation