nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2019‒10‒07
five papers chosen by

  1. Homeownership Investment and Tax Neutrality. A joint assessment of income and property taxes in Europe By Francesco Figari; Gerlinde Verbist; Francesca Zantomio
  2. Does the pension system’s income statement really matter? A proposal for an NDC scheme with disability and minimum pension benefits By Anne M. Garvey; Manuel Ventura-Marco; Carlos Vidal-Meliá
  3. Tax Incentives for Investment: Evidence from Japan's High-Growth Era By Mariko Hatase; Yoichi Matsubayashi
  4. Nachwuchswissenschaftliche Impulse zur empirischen Rechnungslegungsforschung By Jödicke, Dirk
  5. Mandated Financial Reporting and Corporate Innovation By Matthias Breuer; Christian Leuz; Steven Vanhaverbeke

  1. By: Francesco Figari (Department of Economics, University of Insubria; ISER, University of Essex; CeRP Collegio Carlo Alberto and Dondena Bocconi University); Gerlinde Verbist (Centre for Social Policy Herman Deleeck, University of Antwerp); Francesca Zantomio (Department of Economics, University Of Venice Cà Foscari)
    Abstract: Western countries’ income tax system exempts the return from investing in owner-occupied housing. Returns from other investments are instead taxed, thus distorting households’ portfolio choices, although it is argued that housing property taxation might act as a counterbalance. Based on data drawn from the Statistics of Income and Living Conditions and the UK Family Resources Survey, and building on tax benefit model EUROMOD, we provide novel evidence on the interplay of income and property taxation in budgetary, efficiency and equity terms in eight European countries. Results reveal that, even accounting for recurrent housing property taxation, a sizeable ‘homeownership bias’ i.e. a lighter average and marginal taxation for homeownership investment, is embedded in current tax systems, and displays heterogeneous distributional profiles across different countries. Housing property taxation represents only a partial correction towards neutrality.
    Keywords: Homeownership investment, tax neutrality, income tax, property tax, distributional effect, Europe, microsimulation
    JEL: D31 H23 I31 I32
    Date: 2019
  2. By: Anne M. Garvey (Department of Economics and Management Sciences, University of Alcalá, Spain.); Manuel Ventura-Marco (Department of Financial Economics and Actuarial Science, University of Valencia, Spain.); Carlos Vidal-Meliá (Department of Financial Economics and Actuarial Science, University of Valencia (Spain) and research affiliation with the Instituto Complutense de Análisis Económico (ICAE), Complutense University of Madrid (Spain) and the Centre of Excellence in Population Ageing Research (CEPAR), UNSW (Australia).)
    Abstract: This paper develops a full accounting model for monitoring the solvency of a notional defined contribution (NDC) pension scheme with disability and minimum pension benefits. Using the annual report of the Swedish pension system as a benchmark (TSPS, 2018), we extend the “Swedish” actuarial balance developed by Pérez-Salamero et al. (2017) by adding an income statement which fully explains the reasons behind the changes in the system’s solvency by type of benefit. In line with the reference model, assets and liabilities are measured at present value at each reporting date, and changes in present value are reported in each period as income or expenses and are included on the income statement. Our proposed model is a step forward because it, also, incorporates the changes for disability pensions, the value of change in the discount rate and the explicit recognition of non-contributory rights (NCRs) into the Income statement. This accounting framework integrates both contributory and social aspects of public pensions and discloses the real cost of the disability contingency and the redistribution through minimum pensions. The paper contains a numerical example consisting of an income statement for a (fictional) already-functioning system to illustrate the main differences between the Swedish NDC scheme and our model. Mathematical details are presented in a comprehensive technical appendix.
    Keywords: Disability Insurance; Fair Presentation; Minimum Pensions; Notional Defined Contribution; Pay-as-you-go; Pension Accounting; Retirement; Sweden; True and Fair view.
    JEL: G22 H55 H83 J26 M48
    Date: 2019–07
  3. By: Mariko Hatase (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail:; Yoichi Matsubayashi (Graduate School of Economics, Kobe University (E-mail:
    Abstract: Tax devices have occasionally been adopted as policy tools to promote economic growth in major industrialized countries after the Second World War. In Japan, various accelerated depreciation schemes under the name 'special depreciation' were employed as major devices to stimulate investments. In this paper, we manually collect firm-level data series in the heyday of the device from the mid-1950s to the early 1970s. The findings from firm-level data are as follows: the aggregated special depreciation hit two peaks when the schemes were expanded, applying special depreciation tax incentives prevailed among listed companies, and the actual amounts varied across firms with strong upward biases. A detailed examination of each firm's financial statements indicates that each firm retained its discretion when applying the scheme and sometimes chose not to enjoy the full benefits. An empirical analysis reveals that firms with relatively less capital to labor tended to use larger special depreciation, hinting at the probability of intended effects of policy devices. Increases in the number of designated machines for the scheme- once considered to represent its inefficiency-actually activated the usage of schemes by firms.
    Keywords: Capital investments, Corporate taxes, Special depreciation, Investment policy, High-growth era
    JEL: E22 E62 H25 N15
    Date: 2019–09
  4. By: Jödicke, Dirk (Department of Economics of the Duesseldorf University of Applied Sciences)
    Abstract: Der Sammelband enthält gekürzte Fassungen von drei herausragenden Bachelor-Abschlussarbeiten, die im Jahr 2019 am Fachbereich Wirtschaftswissenschaften der Hochschule Düsseldorf eingereicht wurden. Obgleich durch die Bearbeitungszeit von 10 Wochen limitiert, enthalten die Arbeiten wertvolle Forschungsideen und erste empirische Tendenzen und bieten damit Impulse für umfangreichere Forschungsvorhaben. Die erste Arbeit gibt einen Überblick über die Goodwillbestände der DAX30-Unternehmen zum 31.12.2018 und zeigt die Auswirkungen im Falle von Goodwillabschreibungen auf. In der zweiten Arbeit erfolgt eine Simulation der Auswirkungen der neuen Leasingregeln des IFRS 16 auf Abschlüsse zum 31.12.2018. Die dritte Arbeit zeigt auf, wie die durch die Marktmissbrauchsverordnung neu geregelten Ad-hoc-Veröffentlichungspflichten durch deutsche Unternehmen praktisch angewandt werden.
    Abstract: This anthology contains short versions of three Bachelor's theses submitted to the Faculty of Business Studies at Hochschule Düsseldorf - University of Applied Sciences in 2019.Limited by the time for processing (10 weeks), these papers contain useful research concepts and point out first empirical trends giving impetus for further research. The first one gives overview over goodwill in DAX30 financial statements on 31.12.2018 and points out implications in case of goodwill impairments. The second one simulates impacts of new leasing standard IFRS 16 on financial accounts on 31.12.2018. The third paper shows the practical application of new ad-hoc-publicity-rules through the EU marketabuse regulation by German companies.
    Keywords: Ad-hoc-Publizität, Geschäfts- oder Firmenwert, Goodwill, IFRS 16, Leases, Leasing, ad-hoc-publicity, market abuse regulation
    JEL: M4
  5. By: Matthias Breuer; Christian Leuz; Steven Vanhaverbeke
    Abstract: We investigate the impact of reporting regulation on corporate innovation activity. Exploiting thresholds in Europe’s regulation and a major enforcement reform in Germany, we find that forcing a greater share of firms to publicly disclose their financial statements reduces firms’ innovative activities at the industry level. At the same time, it increases firms’ reliance on patenting to protect their innovations, to the extent they continue innovating. Our evidence is consistent with reporting mandates having significant real effects by imposing proprietary costs on innovative firms, which diminishes their incentives to engage in innovative activities. Importantly, we examine and find that this decline in innovative activity is not fully compensated by positive information spillovers (e.g., to competitors, suppliers, and customers) within industries. Thus, our evidence implies that proprietary costs induced by reporting mandates are important consideration for regulators and policy makers.
    JEL: K22 L51 M41 M48 O43 O47
    Date: 2019–09

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