Tests of a Deferred Tax Explanation of the Negative Association between the LIFO Reserve and Firm Value

Guenther and Trombley (1994) and Jennings, Simko, and Thompson (1996) document a negative association between a firm\u27s last-in, first-out (LIFO) reserve and the market value of its equity. In this paper, we test a deferred tax explanation of this negative association. Specifically, we argue that investors, conditional on adjusting inventory to as-if first-in, first-out (FIFO), estimate a firm\u27s future LIFO liquidation tax burden as its LIFO reserve multiplied by the appropriate corporate tax rate and include this tax-adjusted LIFO reserve in the valuation of a LIFO firm\u27s net assets. On the basis of this argument, the tax-adjusted LIFO reserve is in effect an estimate of an off-balance-sheet deferred tax liability and, as a result, we predict a negative association between the tax-adjusted LIFO reserve and market value of equity. We test our deferred tax explanation by estimating a valuation model in which a firm\u27s market value of equity is expressed as a function of the firm\u27s assets, liabilities, deferred tax liability, and tax-adjusted LIFO reserve; the model is estimated separately in years preceding and following the reduction of tax rates mandated by the US Tax Reform Act of 1986. Test results provide strong support for the deferred tax explanation of the negative association between a firm\u27s LIFO reserve and the market value of its equity

Board interlocks and the diffusion of disclosure policy

We examine whether board connections through shared directors influence firm disclosure policies. To overcome endogeneity challenges, we focus on an event that represents a significant change in firm disclosure policy: the cessation of quarterly earnings guidance. Our research design allows us to exploit the timing of director interlocks and therefore differentiate the director interlock effect on disclosure policy contagion from alternative explanations, such as endogenous director-firm matching or strategic board stacking. We find that firms are more likely to stop providing quarterly earnings guidance if they share directors with previous guidance stoppers. We also find that director-specific experience from prior guidance cessations matters for disclosure policy contagion. The positive effect of interlocked directors on the likelihood of quarterly earnings guidance cessation is particularly strong for firms with interlocked directors who experienced positive outcomes from prior guidance cessation decisions. Overall, our evidence is consistent with interlocked directors serving as conduits for information sharing that leads to the spread of corporate disclosure policies

Internal Control Disclosures, Monitoring, and the Cost of Debt

We test the relationship between the change in a firm\u27s cost of debt and the disclosure of a material weakness in an initial Section 404 report. We find that, on average, a firm\u27s credit spread on its publicly traded debt marginally increases if it discloses a material weakness. We also examine the impact of monitoring by credit rating agencies and/or banks on this result and find that the result is more pronounced for firms that are not monitored. Additional analysis indicates that the effect of bank monitoring appears to be the primary driver of these monitoring results. This finding is consistent with the argument that banks are effective delegated monitors for the debt market. The results of this study suggest the need for future research, particularly to test the differential effects of monitoring on the cost of debt compared to the cost of equity

Search for dark matter produced in association with bottom or top quarks in √s = 13 TeV pp collisions with the ATLAS detector

A search for weakly interacting massive particle dark matter produced in association with bottom or top quarks is presented. Final states containing third-generation quarks and miss- ing transverse momentum are considered. The analysis uses 36.1 fb−1 of proton–proton collision data recorded by the ATLAS experiment at √s = 13 TeV in 2015 and 2016. No significant excess of events above the estimated backgrounds is observed. The results are in- terpreted in the framework of simplified models of spin-0 dark-matter mediators. For colour- neutral spin-0 mediators produced in association with top quarks and decaying into a pair of dark-matter particles, mediator masses below 50 GeV are excluded assuming a dark-matter candidate mass of 1 GeV and unitary couplings. For scalar and pseudoscalar mediators produced in association with bottom quarks, the search sets limits on the production cross- section of 300 times the predicted rate for mediators with masses between 10 and 50 GeV and assuming a dark-matter mass of 1 GeV and unitary coupling. Constraints on colour- charged scalar simplified models are also presented. Assuming a dark-matter particle mass of 35 GeV, mediator particles with mass below 1.1 TeV are excluded for couplings yielding a dark-matter relic density consistent with measurements

Alcohol use and burden for 195 countries and territories, 1990-2016 : a systematic analysis for the Global Burden of Disease Study 2016

Background Alcohol use is a leading risk factor for death and disability, but its overall association with health remains complex given the possible protective effects of moderate alcohol consumption on some conditions. With our comprehensive approach to health accounting within the Global Burden of Diseases, Injuries, and Risk Factors Study 2016, we generated improved estimates of alcohol use and alcohol-attributable deaths and disability-adjusted life-years (DALYs) for 195 locations from 1990 to 2016, for both sexes and for 5-year age groups between the ages of 15 years and 95 years and older. Methods Using 694 data sources of individual and population-level alcohol consumption, along with 592 prospective and retrospective studies on the risk of alcohol use, we produced estimates of the prevalence of current drinking, abstention, the distribution of alcohol consumption among current drinkers in standard drinks daily (defined as 10 g of pure ethyl alcohol), and alcohol-attributable deaths and DALYs. We made several methodological improvements compared with previous estimates: first, we adjusted alcohol sales estimates to take into account tourist and unrecorded consumption; second, we did a new meta-analysis of relative risks for 23 health outcomes associated with alcohol use; and third, we developed a new method to quantify the level of alcohol consumption that minimises the overall risk to individual health. Findings Globally, alcohol use was the seventh leading risk factor for both deaths and DALYs in 2016, accounting for 2.2% (95% uncertainty interval [UI] 1.5-3.0) of age-standardised female deaths and 6.8% (5.8-8.0) of age-standardised male deaths. Among the population aged 15-49 years, alcohol use was the leading risk factor globally in 2016, with 3.8% (95% UI 3.2-4-3) of female deaths and 12.2% (10.8-13-6) of male deaths attributable to alcohol use. For the population aged 15-49 years, female attributable DALYs were 2.3% (95% UI 2.0-2.6) and male attributable DALYs were 8.9% (7.8-9.9). The three leading causes of attributable deaths in this age group were tuberculosis (1.4% [95% UI 1. 0-1. 7] of total deaths), road injuries (1.2% [0.7-1.9]), and self-harm (1.1% [0.6-1.5]). For populations aged 50 years and older, cancers accounted for a large proportion of total alcohol-attributable deaths in 2016, constituting 27.1% (95% UI 21.2-33.3) of total alcohol-attributable female deaths and 18.9% (15.3-22.6) of male deaths. The level of alcohol consumption that minimised harm across health outcomes was zero (95% UI 0.0-0.8) standard drinks per week. Interpretation Alcohol use is a leading risk factor for global disease burden and causes substantial health loss. We found that the risk of all-cause mortality, and of cancers specifically, rises with increasing levels of consumption, and the level of consumption that minimises health loss is zero. These results suggest that alcohol control policies might need to be revised worldwide, refocusing on efforts to lower overall population-level consumption.Peer reviewe

Erratum to: 36th International Symposium on Intensive Care and Emergency Medicine

[This corrects the article DOI: 10.1186/s13054-016-1208-6.]