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

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

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

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

Effects of Anacetrapib in Patients with Atherosclerotic Vascular Disease

BACKGROUND: Patients with atherosclerotic vascular disease remain at high risk for cardiovascular events despite effective statin-based treatment of low-density lipoprotein (LDL) cholesterol levels. The inhibition of cholesteryl ester transfer protein (CETP) by anacetrapib reduces LDL cholesterol levels and increases high-density lipoprotein (HDL) cholesterol levels. However, trials of other CETP inhibitors have shown neutral or adverse effects on cardiovascular outcomes. METHODS: We conducted a randomized, double-blind, placebo-controlled trial involving 30,449 adults with atherosclerotic vascular disease who were receiving intensive atorvastatin therapy and who had a mean LDL cholesterol level of 61 mg per deciliter (1.58 mmol per liter), a mean non-HDL cholesterol level of 92 mg per deciliter (2.38 mmol per liter), and a mean HDL cholesterol level of 40 mg per deciliter (1.03 mmol per liter). The patients were assigned to receive either 100 mg of anacetrapib once daily (15,225 patients) or matching placebo (15,224 patients). The primary outcome was the first major coronary event, a composite of coronary death, myocardial infarction, or coronary revascularization. RESULTS: During the median follow-up period of 4.1 years, the primary outcome occurred in significantly fewer patients in the anacetrapib group than in the placebo group (1640 of 15,225 patients [10.8%] vs. 1803 of 15,224 patients [11.8%]; rate ratio, 0.91; 95% confidence interval, 0.85 to 0.97; P=0.004). The relative difference in risk was similar across multiple prespecified subgroups. At the trial midpoint, the mean level of HDL cholesterol was higher by 43 mg per deciliter (1.12 mmol per liter) in the anacetrapib group than in the placebo group (a relative difference of 104%), and the mean level of non-HDL cholesterol was lower by 17 mg per deciliter (0.44 mmol per liter), a relative difference of -18%. There were no significant between-group differences in the risk of death, cancer, or other serious adverse events. CONCLUSIONS: Among patients with atherosclerotic vascular disease who were receiving intensive statin therapy, the use of anacetrapib resulted in a lower incidence of major coronary events than the use of placebo. (Funded by Merck and others; Current Controlled Trials number, ISRCTN48678192 ; ClinicalTrials.gov number, NCT01252953 ; and EudraCT number, 2010-023467-18 .)