nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2016‒03‒17
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Accounting for business income in measuring top income shares. Integrated accrual approach using individual and firm data from Norway By Annette Alstadsæter; Martin Jacob; Wojciech Kopczuk; Kjetil Telle
  2. Management of financial results of the organization by using management accounting techniques By Andrew Sokolov; Tatyana Elsukova; Albina Sadykova
  3. Republic of Slovenia: Technical Assistance Report-The 2013 Property Tax Act: Evaluation of its Design and the Employed Mass Valuation System By International Monetary Fund
  4. The Financial Wealth of Corporations; A First Look at Sectoral Balance Sheet Data By Yuko Hashimoto; Noriaki Kinoshita
  5. Impact of Services Trade on India’s Economic Growth and Current Account Balance: Evidence from Post-Reform Period By Mini P. Thomas

  1. By: Annette Alstadsæter; Martin Jacob; Wojciech Kopczuk; Kjetil Telle (Statistics Norway)
    Abstract: Business income is important in the upper tail of the personal income distribution, but the extent to which it is captured by measures of personal income varies substantially across tax regimes. Using linked individual and firm data from Norway, we are able to attribute business income to personal owners as it accrues rather than when it is realized. This adjustment leads to an increase in top income shares, and the size of this effect varies dramatically depending on the tax regime in place. After a tax reform in 2005 that created strong incentives to retain earnings in the business, the increase is massive: accounting for earnings retained in the corporate sector leads to more than doubling of the share of income of top 0.1% in some years. As the result, traditional measures of top income shares become misleadingly low (even when accounting for capital gains). We speculate on the implications of our findings for levels and trends in top income shares observed in other countries. In particular, we note that the major tax reforms of the 1980s in the United States correspond to a shift in the direction of business income being passed through to personal owners, and argue that top income shares constructed using income tax statistics before 1987 are likely to be significantly understated relative to those afterwards.
    Keywords: top income share; corporate income; business income; tax; inequality
    JEL: H3 H2 D22 G3 J3
    Date: 2016–02
  2. By: Andrew Sokolov (Kazan Federal University); Tatyana Elsukova (Kazan Federal University); Albina Sadykova (Kazan Federal University)
    Abstract: The purpose of this article is to analyze methods of management accounting and their impact on the financial results of the company. In flexible manufacturing systems, the information required for management must be obtained in a short time and with minimal costs. We studied in more detail both in theoretical and practical terms, method of management accounting on the basis of the theory of constraints (throughput accounting, TA),shows its historical aspects, principles and methods, methods of calculation of financial results of the company based on it. The main difference of TA method from traditional methods of management accounting is the direction offset from a focus on costs to assessing the value of generating money (throughput). Throughput accounting is designed to solve wide range of problems, through the use of information about the inputs and outputs of the system. Clearly defined information system will enable managers to make informed management decisions in the areas of production, promotion of products (works, services), pricing and others. The article outlines the problem of determining the Throughput rate of the product and the company as a whole and their solutions.
    Keywords: financial results, management accounting, costs, throughput accounting, theory of constraints
    JEL: M41 M40 M49
  3. By: International Monetary Fund
    Abstract: This report provides to the Ministry of Finance a review of the current mass valuation appraisal system, and further policy directions on improved tax design for a property tax that would not invite Constitutional challenge, especially in respect of tax base definition, tax rate policy, and tax relief. These measures combined would broaden the base with less rate discrimination. The mission identified the following key structural problems as to the design of the real property tax and suggested corrective steps with the view to improving collections from property taxes across Slovenia
    Date: 2016–02–22
  4. By: Yuko Hashimoto; Noriaki Kinoshita
    Abstract: This paper analyzes the nonfinancial corporation (NFC) sector’s financial balance sheets using data available from the OECD. In our sample of 20 advanced economies, corporate debt in percent of GDP—a frequently used indicator in the context of corporate balance sheet adjustments—has remained high since the global financial crisis, with significant differences in the level and the trend between the high-debt and low-debt groups. Looking at financial balance sheets more broadly, including net financial wealth, the NFC sector’s balance sheet conditions have improved recently, particularly reflecting accumulation of corporate cash and valuation gains on financial assets. Longer time series and more granular data for Japan, which has been experiencing a prolonged period of balance sheet adjustments, indicate that a continued strengthening of balance sheets might occur even after debt levels are reduced.
    Date: 2016–01–26
  5. By: Mini P. Thomas
    Abstract: Economic Growth and External Stabilisation (defined in terms of Current Account Balance as a percentage of GDP) is a top priority for policy-makers, while laying out the macroeconomic framework for Indian economy. Government of India had targeted for an average GDP growth rate of 9 percent and a Current Account Deficit (CAD) below 2.5 percent of GDP during the five-year period from 2012-2017. However, the actual CAD of Indian economy widened to 4.2% of GDP in 2011-12, and further reached a historic high CAD of 4.7 percent of GDP in 2012-13. Given such a scenario, this paper aims to estimate the impact of services trade on India’s Economic Growth and Current Account Balance, during the post-reform period from 1990-91 to 2011-12. Facilitated by economic globalisation, domestic liberalization, and technological advances which resulted in increasing international fragmentation of the production process, India’s services trade began growing rapidly post 1991. With the help of Thirlwall’s Balance of Payments Constrained Growth Model and ARDL approach to cointegration, this study estimates and establishes the crucial role of services trade in achieving the policy objectives of economic growth and external stabilisation simultaneously for Indian economy. This study also examines the impact of services exports on India’s economic growth, by comparing the latest officially published input-output table of India for 2007-08, with that of 1993-94. Among the major services in India’s export basket, construction, transport and business services are found to exhibit strongest backward linkages, and hence can act as engines of export-led growth. Role of services imports in India’s export-led growth and the import content going into production of India’s services exports is analysed using the TIVA database for 1995 and 2008, which have implications for India’s external stabilisation. Foreign value added content in India’s services exports is found to be highest in case of business services, transport services and telecommunications.
    Keywords: Services Trade, Current Account Deficit, Economic Growth, Backward Linkages, Trade in Value Added
    JEL: F14 F32 F43 C67
    Date: 2016–02

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