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Incremental information content of option-related excess tax benefit under FASB Statement No. 123R A research note

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Purpose – This study aims to examine the incremental valuation implication of excess realized tax
benefit under Statement of Financial Accounting Standard (SFAS) No. 123R: share-based payment
(123R excess tax benefit), which is required to be reported as a component of financing cash flows by
the publicly traded corporations.
Design/methodology/approach – The sample comprises of Standard and Poor’s (S&P); large-,
mid- and small-cap firms who adopted SFAS No. 123(R) on January 1, 2006. The study covers a time
period of the first and second quarters of 2006.
Findings – The multivariate regression analyses indicate that the capital market evaluates the SFAS
123R excess tax benefit in presence of accruals, and operating, investing and other financing cash-flow
components at different rates in pricing equity securities.
Research limitations/implications – The primary results, however, are mostly restricted to largeand
mid-cap S&P firms. No incremental valuation consequence of SFAS 123R excess tax benefits for
small-cap S&P firms is observed.
Originality/value – The findings suggest that the 123R excess tax benefit reported as a financing
cash-flow component is incrementally informative in equity valuation but the timing and extent of its
market valuation is impacted by firm size, its visibility and information environment, and the
magnitude of the excess realized tax benefit in dollar terms.

Keywords Accounting, Benefits, Cash flow, Accounting valuations, United States of America

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Informasi Detail

Judul Seri

International Journal of Accounting and Information Management

No. Panggil

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Penerbit

: Emerald Group., 2011

Deskripsi Fisik

International Journal of Accounting and Information Management Vol. 19 No. 2, 2011 pp. 146-168

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

AKUNTANSI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

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