The Effects Of The Liability Method Of Interperiod Income Tax Allocation On The Financial Statements Of Early Adopters Of SFAS 96

Abstract

This study examines the effects of the liability method on the financial statements of SFAS 96s early adopters, and the effects of the early adopters switch to the liability method on the intercompany comparability among firms during the standards transition period. The results of the study indicate that, although the financial results of the early adopters were somewhat affected by the switch to the new method, the inter-company comparability among firms was not so adversely affected.