MARKET VALUATION OF IMPUTATION CREDIT ACCOUNT: EVIDENCE FROM TAIWAN

Chii-Shyan Kuo ； Ji-Liang Syue

《Advances in Financial Planning and Forecasting》 7期 (2016/10) Pp. 117-140

https://doi.org/10.6292/AFPF.2016.07.06

摘要

Whether the Imputation Credit Account (ICA) should be recognized as an asset in the firm's statement of financial position has caused heated debates among standard setters, accounting professionals, and academia in countries where the Income Tax laws employ the Integration of Corporate and Individual Income Tax System. The purpose of this study is to examine the market valuation of the disclosed imputation credit account (ICA). We use data composed of public firms listed in Taiwan Stock Exchange (TSE) and Over-the-Counter market (OTC) from 1998 to 2011. We find that ICA is significantly and positively associated with share prices for firms listed in both the TSE and OTC markets. This finding supports the position that investors view the disclosed ICA an asset to the firm. In addition, we find that the pricing effect of ICA is greater for TSE firms than for OTC firms. Further, we find the pattern of the pricing effect of ICA to be commensurate with the levels of ICA over the sample period. Moreover, we find that industry sectors with positive ICA pricing effect tend to have greater levels of ICA. Finally, our results are robust to alternative model specifications and variable measurements.

關鍵字

Imputation Credit Account (ICA) ； Value Relevance ； Disclosure vs. Recognition

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