Cookie Jar Accounting for Foreign Subsidiaries
15 Pages Posted: 9 Jul 2015
Date Written: 2012
Abstract
Current tax policy encourages U.S. corporations to use an accounting method, “cookie jar accounting”, to report income. For financial accounting, cookie jar accounting is generally associated with financial statement fraud and concealing illegal acts. For tax purposes, cookie jar accounting is accepted as tax avoidance. The purpose of this paper is to compare cookie jar accounting for financial and tax reporting, consider the consequences of tax cookie jars, and suggest an end to current tax policies favoring tax cookie jars.
Suggested Citation: Suggested Citation
Fullwood, Virginia and Wilson, Tim, Cookie Jar Accounting for Foreign Subsidiaries (2012). Journal of Applied Financial Research, Vol II, 2012, 23-36, Available at SSRN: https://ssrn.com/abstract=2627845
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