IFRS could increase US corporate tax bills
Switch in accounting produces more earnings and therefore more tax
US companies face paying more tax because international accounting standards
rules out a particular form of inventory accounting.
CFO.com reports that around
a third of US companies uses ‘last-in first-out’ inventory accounting which is
not permitted under IFRS. Research from the
Tech Financial Analysis Lab points to the change creating a boost to
earnings and therefore increases taxes.
Professor Charles Mulford at Gerogia Tech is quoted saying. ‘We think that
the tax effects could reduce the market values of the affected companies.’