Accounting for Tax Benefits of Employee Stock Options and Implications for Research

By Michelle Hanlon, Terry Shevlin. 2002

147 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/007056c410f2e5a93deaff5559a0b52161c34740

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Citations in the corpus

Trends in Book-Tax Income and Balance Sheet Differences (2002, background): “Stock options Hanlon and Shevlin (2002) provide a detailed discussion of the accounting treatment for nonqualified stock options, and the difficulty such treatment presents in controlling for the booktax difference caused by stock option deductions.”
The persistence of earnings and cash flows and the role of special items: Implications for the accrual anomaly (2006, unknown): “certain effects related to the tax effects of stock options (e.g., Hanlon & Shevlin, 2002 ) and changes in some financial assets such as marketable securities.”
Home Country Tax System Characteristics and Corporate Tax Avoidance: International Evidence (2012, unknown): “This measure captures the required level of book-tax conformity in the firm’s home country.15 Countries 13 Under U.S. Generally Accepted Accounting Principles (GAAP), the cash tax savings from stock options are not included in current tax expense (Hanlon and Shevlin 2002).”
The Persistence and Pricing of Earnings, Accruals, and Cash Flows When Firms Have Large Book-Tax Differences (2003, unknown): “See Hanlon and Shevlin (2002) for additional details regarding the accounting for tax beneﬁts of stock options.”
The Role of Managerial Ability in Corporate Tax Avoidance (2017, unknown): “Hanlon and Shevlin (2002) note that stock options can generate large tax return deductions, which lowers cash taxes paid (the CASHETR numerator).”
What Does Tax Aggressiveness Signal? Evidence from Stock Price Reactions to News About Tax Aggressiveness (2007, unknown): “26 See Hanlon and Shevlin (2002) for more details on the accounting for the tax benefits of stock options.”
How Much Will Firms Pay for Earnings that Do Not Exist? Evidence of Taxes Paid on Allegedly Fraudulent Earnings (2004, unknown): “23 We use one of two methods to obtain the amount of the tax benefits from stock options, both of which are outlined in Hanlon and Shevlin (2002).”
The association between book-tax conformity and earnings management (2014, unknown): “Second, assuming in a conformed system that tax rules are ultimately used as the basis for reported income due to the political pressures noted by Hanlon and Shevlin (2005), tax rules generally allow for less managerial discretion than accounting rules because the two systems have different goals.”
Using tax return data to simulate corporate marginal tax rates (2008, unknown): “Exercising nonqualified stock options results in a tax deduction for the corporation that could make taxes paid substantially less than financial statement reported current tax expense (Graham, Lang and Shackelford 2004; Hanlon and Shevlin 2002).”
CEO After-Tax Compensation Incentives and Corporate Tax Avoidance (2014, background): “18 Hanlon and Shevlin (2002) describe possible errors in using ETRs in accounting research.”
Taxable Income, Future Earnings, and Equity Values (2004, background): “…does not reflect the tax benefits associated with the exercise of nonqualified employee stock options (quite a large effect for many firms; see Hanlon and Shevlin 2002; Desai 2002), as well as the tax benefits from other, less common or material items (e.g., tax benefits from dividends paid…”