Knowledge that Transforms

Abstract Reviews the book "Corporate Social Accounting," by Ralph Estes.

Abstract Reviews the book "Bankruptcy and Insolvency Accounting: Practice and Procedure," by Grant W. Newton.

Abstract ABSTRACT: Research grants from colleges and universities may, under some circumstances, be exempt from federal income taxes. The basic requirements under the law are thoroughly discussed and the characteristics of research grants are described. Also, the excludability of grants commonly received by accounting faculty is investigated. Finally, some suggestions are made to enhance the likelihood of having research grants qualify for exclusion from taxes.

Abstract Reviews the book "Research Methodology and Business Decisions," by John W. Buckley, Marlene H. Buckley and Hung-Fu Chiang.

Abstract Reviews the book "A Financial Efficiency Model: Long-Range Financial Planning," by Charles Robert Carlson.

Abstract Comments on a study about the effects of participation, authoritarianism and feedback on cognitive dissonance in a standard setting situation. Criticism on the study's design; Errors regarding the conditions necessary and sufficient for dissonance arousal to take place.

Abstract Some corporate groups that file consolidated returns use different methods to allocate the consolidated tax liability for tax return and financial reporting purposes. Such dual allocations can cause the tax liability reported in an affiliate's financial statements to differ from the liability it reports to the Internal Revenue Service. This is not a "timing" or "permanent" difference as the terms normally are used. Differences arising from dual allocations are the focus of this paper. The paper examines the allocation of consolidated tax liabilities. An illustration is used to demonstrate the allocation methods specified for tax purposes, and the fact that the results of these methods generally do not conform to sound accounting practice is noted. An allocation method consistent with sound accounting practice then is proposed. Finally, the practice of using different allocation methods for tax and financial reporting purposes is examined, and the need for action by the accounting profession in this area is pointed out.

Abstract A distinction in accounting which is often difficult for students to grasp concerns the difference in purpose between adjustments for general and specific price-level changes. This article describes how indifference curve analysis can be used to explain to students why adjustment to market value reflects unrealized gains and losses resulting from changes in the price of business assets relative to other goods, whereas general price-level adjustments eliminate gains and losses caused by the changing value of all goods vis a vis money, as well as to reflect gains and losses on monetary items.

Abstract ABSTRACT: The paper examines the possible effects of insider trading rules on the incentives for firms to produce and disseminate information about themselves. The incentives to produce and disseminate information are examined analytically, both within a market free of insider trading rules and within a market with the existing insider trading rules. Thus, the incremental effect of insider trading rules on the incentives is assessed. It is concluded that the net effect of insider trading rules will most likely inhibit the generation, processing, and communication of inside information. And to the extent that insider information has allocative effects, the net effect of insider trading rules will be the deterrents of the production and dissemination of information that improves the allocation of resources. To the extent that insider trading rules are designed to prevent undesirable redistributions of wealth that could result from monopolistic access to information, and if this goal is to be taken for granted, then a more extensive regulation of what information is to be produced and disclosed may be needed to insure that information useful for allocation decisions is produced by the firm.