National Tax Journal

Reconciling Global Financial Reporting with Domestic Taxation

Caitlin Bokulic, Erin Henry, and George A. Plesko

65 National Tax Journal 933-59 (December 2012)

Abstract:

This paper presents a new reconciliation of financial to taxable income, drawing from public financial statement and Schedule M-3 data for a panel of firms. The reconciliation compares the financial statement income of a firm’s consolidated financial statement entities to the financial statement income of a firm’s tax return entities on a worldwide, domestic, and foreign income basis. This analysis highlights the relation between these various measures of corporate income to better understand the magnitudes of, and differences between, domestic and global corporate income.

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