What Can We Infer About a Firm's Taxable Income from its Financial Statements?

Hanlon, Michelle

doi:10.2139/ssrn.419741

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What Can We Infer About a Firm's Taxable Income from its Financial Statements?

56 Pages Posted: 2 Jul 2003

See all articles by Michelle Hanlon

Michelle Hanlon

Massachusetts Institute of Technology (MIT) - Sloan School of Management

There are 2 versions of this paper

Abstract

In this paper I review and describe the income tax disclosures currently required in firms' financial statements. I discuss many of the problems with trying to estimate a firm's actual tax liabilities and taxable income from the income tax expense and disclosures to the financial statements. In doing so, I reveal the conditions under which taxable income may most accurately be estimated from financial statements as well as those conditions which make this task difficult, if not impossible.

Keywords: Taxable income, tax expense, FAS 109, tax disclosures

JEL Classification: M41, M45, H25

Suggested Citation: Suggested Citation

Hanlon, Michelle, What Can We Infer About a Firm's Taxable Income from its Financial Statements?. Available at SSRN: https://ssrn.com/abstract=419741 or http://dx.doi.org/10.2139/ssrn.419741