nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2007‒11‒03
three papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Towards an understanding of the phases of goodwill accounting in four Western capitalist countries: From stakeholder model to shareholder model By Ding, Yuan; Stolowy, Hervé; Richard, Jacques
  2. The distribution of expenditure tax burden before and after tax reform: The case of Cameroon By Tabi Atemnkeng Johannes; Atabongawung Joseph Nju; Afeanyi Azia Theresia
  3. Duopolistic Competition, Taxes, and the Arm's-Length Principle By Korn, Evelyn; Lengsfeld, Stephan

  1. By: Ding, Yuan; Stolowy, Hervé; Richard, Jacques
    Abstract: The objective of this paper is to illustrate that the change in shareholders’ attitude towards firms (from stakeholder model to shareholder model) influences the accounting treatments of goodwill. This study is based on four countries (Great Britain, the United States, Germany, and France) and covers more than a century, starting in 1880. The authors explain that all these countries have gone through four identified phases of goodwill accounting, classified as (1) “static”(immediate or rapid expensing), (2) “weakened static” (write-off against equity), (3) “dynamic” (recognition with amortization over a long period) and (4) “actuarial” (recognition without amortization but with impairment if necessary).
    Keywords: Goodwill – Accounting history – Social nature of accounting – Stakeholder/shareholder models – Corporate governance; France; Germany; Great Britain; United States
    JEL: M41
    Date: 2007–10–25
  2. By: Tabi Atemnkeng Johannes; Atabongawung Joseph Nju; Afeanyi Azia Theresia
    Abstract: This paper examines the incidence of indirect taxation in Cameroon in 1983, 1996 and 2001. Using household surveys for these three years, the paper looks into which consumption taxes are progressive and determines if changes in tax policy influenced the welfare of the poor. The paper suggests that the incidence of expenditure taxes changes with the changing economic environment and reveals that the indirect tax reforms of 1994 and 1999 have been generally pro-poor. In the aggregate, consumption taxes became more progressive than before, partly due to changing consumption patterns following the introduction of new taxes or replacement of old ones.
    Date: 2006–11
  3. By: Korn, Evelyn; Lengsfeld, Stephan
    Abstract: Numerous (high-tax) countries presume that multinational firms use their transfer-pricing policies to shift profits into countries with lower tax rates. To avoid the corresponding loss in tax revenues, tax authorities develop constantly tightening rules to curb transfer-price distortions. Affected firms include the decision of compliance to these rules into their strategic considerations. In a scenario with arm's-length regulation in two countries, we analyze the transfer-pricing policy of a firm that uses the same transfer price for tax and managerial incentive purposes. Thus, the transfer-pricing policy is driven by three issues: interaction with competitors, minimization of tax burden, and avoidance of punishments. The model shows that tighter transfer-pricing rules may help firms to mitigate competition and to increase their profits and that non-compliance to the arm's-length principle is part of their equilibrium strategy.
    Keywords: transfer prices, taxes, arm's-length principle, one set of books, duopolistic competition, enforcement.
    JEL: H25 L22 M40
    Date: 2007–10

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