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Against the background of increasing regulation and spotlight on the tax position of MNEs, this study explores the relationship between tax and performance measurement. The paper is informed by a series of in-depth semi-structured interviews conducted in 2006 with 26 senior tax executives from 15 Silicon Valley-based companies. We also draw on documentary evidence including the relevant 10K reports and take an interpretive approach to the analysis. Many of the performance measures referred to in prior literature were employed in the companies. There was no evidence to suggest the profit centre performance measurement model is being adopted by MNEs for their tax departments. Two distinct aspects particularly exercised the interviewees, that is, the effective tax rate (ETR) and post-tax versus pre-tax performance measurement. Many interviewees did not perceive the ETR as being an appropriate measure of performance, yet they recognised its importance internally and externally. Many companies worked on the basis that there is an ‘acceptable range’ of ETRs which won’t give rise to any unwanted questions. Most interviewees shared the view that a post-tax basis of measuring performance of business units might only serve to increase tax risks, preferring instead for the in-house tax executives to remain the exclusive tax knowledge experts. This study contributes to the diversification of tax research within accounting by demonstrating how qualitative work can provide unique insights. It enhances our understanding of how performance measurement of tax might influence the tax-planning behaviour of in-house tax executives and cautions against exclusive reliance on the ETR as a measure of the effect of tax planning.

The purpose of this paper is to outline the link between value creation, performance measurement and goodwill accounting according to the International Financial Reporting Standards (IFRS) and United States Generally Accepted Accounting Principles (US‐GAAP). Since economic goodwill is identical to the present value of future residual income, the paper examines how accounting information gathered for impairment testing of goodwill according to International Accounting Standard (IAS) 36 and Financial Accounting Standard (FAS) 142 can be used for internal control purposes.

The paper adopts common assumptions in the literature of residual income‐based valuation and analytically derives a periodic performance measure of both value creation and its realization based on information available from impairment testing.

This paper demonstrates that information required by IFRS and US‐GAAP to evaluate a firm's goodwill can be used to design a performance measurement system which provides information about both value creation and realization of value.

From a practical perspective, the paper shows that appropriate adjustments of data used in impairment testing result in information which ideally fits the requirements of an optimal performance measurement system.

The paper presents a performance measure which provides information about the actual creation of value as well as its realization in a period and is superior to traditional residual income‐based performance measures.

The purpose of this study is to look at Chinese mergers and acquisitions (M&A) in Germany on a firm level. It focuses on the benefits and risks from the viewpoint of Germany. In this way, the authors want to close the research gap concerning the financial consequences of Chinese takeovers for the affected German firms. The purpose is to find out if Chinese investors show a specific behavior in terms of profitability, growth and business risks in the acquired companies.

This paper studies the financial situation of German firms two years before and two years after being bought by Chinese companies, by analyzing accounting data of 19 target companies in six economic sectors. In this empirical study, firm performance is measured by profitability, research and development cost, liquidity and financial leverage. It is using the industry adjustment method and calculation of mean and weighted mean considering company size.

Overall, German firms’ financial performance after Chinese M&A did not significantly improve, but they did not worsen either. The changes in financial ratios are different across economic sectors and company sizes. Obviously, the final performance of firms after M&A is quite diverse due to diverse company-specific targets. The results do not reflect common fears about deteriorating situations brought by Chinese involvement drawn in mass media.

The study lacks analysis for a longer period, ideally five years before and five years after M&A. The calculated results of industry mean may differ from the real industry mean, as components are collected from the sample companies accounting for only 70% of the market. Industry means figures are calculated for only one single point in time and assumed to be unchanged over the whole time period. The study covers mostly firms which have total assets of more than €50m, so SMEs are underrepresented.

Owners of German firms that are in target but have not been purchased by Chinese investors can see the trends and anticipate which group of M&A targets their firms are categorized into. If their firms belong to the group of sectors or company sizes that shows negative results of performance after Chinese M&A, they can plan to protect their firms by implementing defending strategies against hostile takeovers. If their firms are in the groups that tend to enhance performance after Chinese M&A, they may be in a good position and able to negotiate for mutually beneficial transactions.

The results are important for political and public discussion. It is shown that Chinese acquisitions of German firms do not have a deteriorating effect, at least not in the short-term. Therefore, the results are a good input to neutralize discussions in German society.

The results disagree with the few previous studies on Chinese M&A in Germany (Bollhorn, 2015; Müller, 2017; Löchel and Sächtig, 2019). While the studies of Bollhorn and Müller are based on subjective methods, the study is based on a detailed financial method. Then, in contrast to the study of Löchel and Sächtig, it is strictly focusing on Chinese/German M&A. Most existing empirical studies are focusing on cross-border M&As from developed to developing countries and there is little attention to acquisitions in the other direction (Ma et al., 2016, p. 22).

The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely, classical HI and reranking. We propose in this paper a class of ethically flexible tools that integrate these two strands. This is achieved using a measure of inequality that merges the well-known Gini coefficient and Atkinson indices, and that allows a decomposition of the total redistributive effect of taxes and transfers into a vertical equity effect and a loss of redistribution due to either classical HI or reranking. An inequality-change approach and a money-metric cost-of-inequality approach are developed. The latter approach makes aggregate classical HI decomposable across groups. As in recent work, equals are identified through a non-parametric estimation of the joint density of gross and net incomes. An illustration using Canadian data from 1981 to 1994 shows a substantial, and increasing, robust erosion of redistribution attributable both to classical HI and to reranking, but does not reveal which of reranking or classical HI is more important since this requires a judgement that is fundamentally normative in nature.

This study investigates the gap between financial accounting income and taxable income (i.e. book‐tax difference) and the value relevance of corporate taxable income in providing information on the quality of reported earnings for Malaysian listed firms during the tax years 2000 to 2004. The large gap between the financial accounting income and taxable income resulting from tax planning activities is reflected in firms’ effective tax rates (ETRs), a proxy for firms’ actual tax burdens. Thus, lower ETRs indicate high tax planning activities undertaken by the sample firms, and vice‐versa for firms with higher ETRs. This study uses a tax‐based earnings quality indicator, that is, the ratio of after‐tax taxable income to reported income (ATTI) to investigate the quality of corporate earnings. The study provides empirical evidence that firms report higher financial accounting income to shareholders and lower taxable income to tax authorities during the years 2000 to 2004. The significant and positive relation statistical results between firms’ after‐tax taxable income (ATTI) and market value of equity provided indicate the value relevance of taxable income as both an earnings quality indicator and a performance measure. Thus, the empirical results suggest investors appear to fully comprehend the quality‐related information in taxable income. This study concludes that first, tax planning activities contribute to a large gap between financial accounting income and taxable income; and second, taxable income contains useful information on the quality of reported earnings.

NOT before time, the future task that lies before industry has been spelled out for us at the various political conferences that have taken place over the past two months.

Strategic alignment remains a key area of focus among business executives. Methods exist with which to determine the type of alignment a firm is following and there has even been research into the factors which aid and hinder the achievement of alignment. What is currently lacking is a financial performance metric with which a firm can benchmark itself against its competition controlling for industry classification or similar alignment perspective. This paper explores the financial performance and alignment of over 500 firms over the past five years. From these data, a regression equation to measure performance controlling for alignment perspective and industry classification is proposed. Such an equation provides firms with an idea of where they stand, on average, within their respective industry and among firms following the same alignment perspective. Implications for managers are also discussed as well as general strategies for managers to facilitate and enhance information technology investment.

To present a measurement framework to capture the importance of the use of knowledge within the new product development (NPD) process.

A literature review enabled 200 product development measures to be compiled. These were categorised into six dimensions: stakeholder contribution, operating context, reuse, invention, exploitation, and NPD performance. Four companies applied selected measures and assessed the cube for its ability to improve measurement and management of their NPD process. This process refined the approach. A web‐based questionnaire (with 130 responses) assessed how a wider population perceived their performance and capability to measure performance in each of the six dimensions.

Respondents consider themselves capable of delivering good products and services, but are less confident in their ability to manage and measure knowledge reuse, invention and exploitation activities.

Full implementation of the measurement cube was not possible. Further research should assess the comprehensiveness, applicability and usefulness of the approach in more detail.

Introduction of the measurement cube and measures in the six dimensions identified would enable companies to go beyond traditional financial measures for their NPD processes and move towards a more performance‐oriented culture.

This paper synthesises the results from many other isolated studies on NPD metrics. In addition, it focuses on the measurement of the NPD process from a knowledge perspective, providing an integrating framework (the measurement cube), which is unique.

This paper seeks to further the understanding of the rather fragmented research in the area of quantitative management accounting research. The purpose of this study is to provide a synthesis and an extended discussion of the literature from the performance outcome standpoint and to foster future research in this area by identifying promising recent developments in the assessment of performance outcomes and gaps in the literature.

A literature analysis was adopted based on empirical studies and literature reviews published in a wide range of journals.

The overall conclusion of this study is that future management accounting research can still make progress in the measurement of performance outcomes.

Research published in English, and the period of the past decade was emphasized to examine recent frontiers of knowledge. The results imply that increasing and simultaneous analysis of various kinds of performance outcomes could be conducted, ranging from accounting‐based to social and environmental outcomes and relative‐to‐peers assessments in different settings. If possible, development of performance outcomes could be investigated with longitudinal and panel, in addition to cross‐sectional, research designs. Attempts could be made to analyze the nature of causality to advance both management accounting literature and social science research.

This study furthers understanding of behaviorally‐, organizationally‐ and strategically‐oriented management accounting research that has played a central role in assessing to what extent people are likely to succeed with their management accounting and control systems in various settings.

This paper presents a theoretical framework and several examples potentially useful for both academic scholars and practitioners.

This paper investigates the relationship between corporate social responsibility (CSR) and the economic performance of corporations. It first examines the theories that suggest a relationship between the two. To test these theories, measures of CSR performance and disclosure developed by the New Consumer Group were analysed against the (past, concurrent and subsequent to CSR performance period) economic performance of 56 large UK companies. Economic performance included: financial (return on capital employed, return on equity and gross profit to sales ratios); and capital market performance (systematic risk and excess market valuation). The results supported the conclusion that (past, concurrent and subsequent) economic performance is related to both CSR performance and disclosure. However, the relationships were weak and lacked an overall consistency. For example, past economic performance was found to partly explain variations in firms’ involvement in philanthropic activities. CSR disclosure was affected (positively) by both a firm’s CSR performance and its concurrent financial performance. Involvement in environmental protection activities was found to be negatively correlated with subsequent financial performance. Whereas a firm’s policies regarding women’s positions seem to be more rewarding in terms of positive capital market responses (performance) in the subsequent period. Donations to the Conservative Party were found not to be related to companies’ (past, concurrent or subsequent) financial and/or capital performance.