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- Title
Discounting Deferred Tax Liabilities: Some Clarifying Comments.
- Authors
Williams, Edward E.; Findlay III, M. Chapman
- Abstract
The article presents some clarifying comments about discounting deferred tax liabilities. Professor Hugo Nurnberg's basic position about the matter is that these liabilities constitute an interest-free loan from the government which should increase net worth and be reported in the income statement for the period in which the deferral takes place. The authors agreed with the thrust of his argument, though his analysis could be improved in several respects. It is noted that the key to the discounting approach is, of course, the appropriate discount rate to employ. Thus, they join professor Nurnberg in the conclusion that the tax anticipation note or penalty rate and the internal rate of return are not appropriate for discounting the deferred tax liability.
- Publication
Journal of Business Finance & Accounting, 1975, Vol 2, Issue 1, p121
- ISSN
0306-686X
- Publication type
Academic Journal
- DOI
10.1111/j.1468-5957.1975.tb00926.x