Current issue

College of Business E-Journal 

Fall 2018 Volume XIII, Issue III

ISSN  number 2158-303X

 

I.  PUTTING VISITORS BACK ON THE TRACKS:
A LOOK AT TOURIST RAIL OPTIONS FOR THE MYRTLE BEACH AREA

Abstract

The Myrtle Beach area is a popular drive-to vacation destination.  Originally, the railroad delivered visitors to Myrtle Beach over 115 years ago.  In 2011, rail service disappeared in the region.  In 2016, a new owner re-established freight rail service to the area.  This manuscript examines the possibility of using this short-haul rail line to develop passenger rail as a tourist attraction for the over 16 million visitors annually to the Myrtle Beach area.

 

  by

Mark Mitchell, DBA (primary contact person)

Professor of Marketing
Craig Wall, Jr. College of Business
Coastal Carolina University
P.O. Box 261954
Conway, SC  29528
(843) 349-2392
mmitchel@coastal.edu

 

Henry Lowenstein, PhD

Professor of Management and Business Law
Craig Wall, Jr. College of Business
Coastal Carolina University
P.O. Box 261954
Conway, SC  29528
(843) 349-2827
hlowenst@coastal.edu

 

Dennis Rauch, PhD

Professor of Marketing
E. Craig Wall, Jr. College of Business
Coastal Carolina University
P.O. Box 261954
Conway, SC  29528
(843) 349-2655
dennisr@coastal.edu

 

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II. Impairment Recognition and Revaluation–
China Publicly Listed Companies

Abstract

The advent of SFAS 142 and IAS 36 regarding handling of asset impairment has spawned research into how these standards influence whether an impairment loss is recorded. Deferred tax items in China have three major components: temporary tax and financial reporting differences in depreciation; impairment losses; and previous losses, which can be carried forward for five years for tax purposes. While the temporary differences in depreciation typically defer taxes and create deferred tax liabilities, impairment losses and previous losses create deferred tax assets because they are not deductible in the current period for tax purposes. A deferred tax asset is created when a firm has overpaid its taxes and is due some form of tax relief sometime in the future when the previously non-deductible loss becomes deductible for tax purposes. A deferred tax asset is viewed as less desirable than a deferred tax liability since deferred tax liabilities result in lower taxable income in the current period, whereas deferred tax assets result in higher taxable income and higher taxes due in the current period. It is in general more desirable to delay paying taxes. In our previous research (Wang et al., 2016), we documented that publicly listed Chinese companies’ median GAAP effective income tax rate is 13% while the median cash effective income tax rate is 26%.  This is less than optimal from a cash flow management standpoint. Many factors contribute to this result. In this research, we investigate the incentives of companies reporting impairment loss, and thus creating deferred tax assets, which lower accounting net income but typically do not lower taxable income.

The goal of this study is to analyze how compensation and insider equity holdings affect impairment loss taking. Our process will include examination of many variables that could impact impairment loss decisions, including firm market value and size, compensation of and ownership percentages of various management groups, Board of Director and Board of Supervisor size and composition, asset mix, leverage and industry. We include all companies listed on the Shenzhen and Shanghai stock exchanges for the period 2011-2016. Chinese Accounting Standard No. 8 (CAS No. 8) prohibits the reversal of long-lived asset impairments to constrain managerial opportunism with respect to previously recognized impairment loss reversal. CAS No. 8 forbids the reversal of long-lived asset impairment losses only, while allowing the reversal of short-term asset impairment losses. Our analysis shows the influence of this differential treatment on firm impairment loss taking behavior.

 

by

Ying Wang, DBA,CPA*
Professor
Accounting Department, College of Business
Montana State University-Billings
Billings, MT 59101
E-mail: ywang@msubillings.edu
Phone: 406-657-2273
Fax: 406-657-2327

 

Scott Butterfield, Ph.D.
Associate Professor
Accounting Department, College of Business
Montana State University-Billings
Billings, MT 59101
E-mail: scott.butterfield1@msubillings.edu
Phone: 406-657-1608
Fax: 406-657-2327

 

Michael Campbell, CPA
Professor
Accounting Department
College of Business
Montana State University-Billings
Billings, MT 59101
E-mail: mcampbell@msubillings.edu
Phone: 406-657-1651
Fax: 406-657-2327

 

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