Tax shields, financial expenses and losses carried forward
This article deals with the proper procedure for calculating Tax Shields (TS). The calculation includes cases where Losses Carried Forward are allowed and there is financial Other Income (OI). The procedure takes into account the magnitude of Adjusted Earnings before Interest and Taxes (EBITAdj) –th...
- Autores:
-
Vélez-Pareja, Ignacio
- Tipo de recurso:
- Article of journal
- Fecha de publicación:
- 2016
- Institución:
- Universidad Nacional de Colombia
- Repositorio:
- Universidad Nacional de Colombia
- Idioma:
- spa
- OAI Identifier:
- oai:repositorio.unal.edu.co:unal/62577
- Acceso en línea:
- https://repositorio.unal.edu.co/handle/unal/62577
http://bdigital.unal.edu.co/61736/
- Palabra clave:
- 33 Economía / Economics
Weighted Average Cost of Capital (WACC)
firm valuation
tax shields
tax savings
losses carried forward
- Rights
- openAccess
- License
- Atribución-NoComercial 4.0 Internacional
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Atribución-NoComercial 4.0 InternacionalDerechos reservados - Universidad Nacional de Colombiahttp://creativecommons.org/licenses/by-nc/4.0/info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2Vélez-Pareja, Ignacio3efee999-3cd0-431a-bdf2-296e7ee8a4ca3002019-07-02T21:04:53Z2019-07-02T21:04:53Z2016-09-01ISSN: 2248-4337https://repositorio.unal.edu.co/handle/unal/62577http://bdigital.unal.edu.co/61736/This article deals with the proper procedure for calculating Tax Shields (TS). The calculation includes cases where Losses Carried Forward are allowed and there is financial Other Income (OI). The procedure takes into account the magnitude of Adjusted Earnings before Interest and Taxes (EBITAdj) –that is, EBIT + OI – OE excluding Financial- compared with Financial Expenses (FE). This comparison defines three intervals and results for TS. If EBITAdj. 0, TS will be 0; if EBITAdj. 0 and less than FE, TSis T × EBITAdj.; finally if EBITAdj. FE, TSis T × FE. When firm possesses OI, TS are not equivalent to the difference in taxes and an adjustment is needed. Proper calculation of TS is important because their value might represent a substantial part of firm value.application/pdfspaUniversidad Nacional de Colombia - Sede Bogotá - Facultad de Ciencias Económicas - Escuela de Economíahttps://revistas.unal.edu.co/index.php/ceconomia/article/view/54352Universidad Nacional de Colombia Revistas electrónicas UN Cuadernos de EconomíaCuadernos de EconomíaVélez-Pareja, Ignacio (2016) Tax shields, financial expenses and losses carried forward. Cuadernos de Economía, 35 (69). pp. 663-689. ISSN 2248-433733 Economía / EconomicsWeighted Average Cost of Capital (WACC)firm valuationtax shieldstax savingslosses carried forwardTax shields, financial expenses and losses carried forwardArtículo de revistainfo:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501http://purl.org/coar/resource_type/c_2df8fbb1http://purl.org/coar/version/c_970fb48d4fbd8a85Texthttp://purl.org/redcol/resource_type/ARTORIGINAL54352-268607-2-PB.pdfapplication/pdf2166162https://repositorio.unal.edu.co/bitstream/unal/62577/1/54352-268607-2-PB.pdf0159378ae67d7aeb05ef836dc130912bMD51THUMBNAIL54352-268607-2-PB.pdf.jpg54352-268607-2-PB.pdf.jpgGenerated Thumbnailimage/jpeg3794https://repositorio.unal.edu.co/bitstream/unal/62577/2/54352-268607-2-PB.pdf.jpg50af6270482d0ff6e94f5dde6485be11MD52unal/62577oai:repositorio.unal.edu.co:unal/625772024-04-25 00:05:09.964Repositorio Institucional Universidad Nacional de Colombiarepositorio_nal@unal.edu.co |
| dc.title.spa.fl_str_mv |
Tax shields, financial expenses and losses carried forward |
| title |
Tax shields, financial expenses and losses carried forward |
| spellingShingle |
Tax shields, financial expenses and losses carried forward 33 Economía / Economics Weighted Average Cost of Capital (WACC) firm valuation tax shields tax savings losses carried forward |
| title_short |
Tax shields, financial expenses and losses carried forward |
| title_full |
Tax shields, financial expenses and losses carried forward |
| title_fullStr |
Tax shields, financial expenses and losses carried forward |
| title_full_unstemmed |
Tax shields, financial expenses and losses carried forward |
| title_sort |
Tax shields, financial expenses and losses carried forward |
| dc.creator.fl_str_mv |
Vélez-Pareja, Ignacio |
| dc.contributor.author.spa.fl_str_mv |
Vélez-Pareja, Ignacio |
| dc.subject.ddc.spa.fl_str_mv |
33 Economía / Economics |
| topic |
33 Economía / Economics Weighted Average Cost of Capital (WACC) firm valuation tax shields tax savings losses carried forward |
| dc.subject.proposal.spa.fl_str_mv |
Weighted Average Cost of Capital (WACC) firm valuation tax shields tax savings losses carried forward |
| description |
This article deals with the proper procedure for calculating Tax Shields (TS). The calculation includes cases where Losses Carried Forward are allowed and there is financial Other Income (OI). The procedure takes into account the magnitude of Adjusted Earnings before Interest and Taxes (EBITAdj) –that is, EBIT + OI – OE excluding Financial- compared with Financial Expenses (FE). This comparison defines three intervals and results for TS. If EBITAdj. 0, TS will be 0; if EBITAdj. 0 and less than FE, TSis T × EBITAdj.; finally if EBITAdj. FE, TSis T × FE. When firm possesses OI, TS are not equivalent to the difference in taxes and an adjustment is needed. Proper calculation of TS is important because their value might represent a substantial part of firm value. |
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2016 |
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2019-07-02T21:04:53Z |
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2019-07-02T21:04:53Z |
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Artículo de revista |
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ISSN: 2248-4337 |
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ISSN: 2248-4337 |
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spa |
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https://revistas.unal.edu.co/index.php/ceconomia/article/view/54352 |
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Universidad Nacional de Colombia Revistas electrónicas UN Cuadernos de Economía Cuadernos de Economía |
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Vélez-Pareja, Ignacio (2016) Tax shields, financial expenses and losses carried forward. Cuadernos de Economía, 35 (69). pp. 663-689. ISSN 2248-4337 |
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Derechos reservados - Universidad Nacional de Colombia |
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Atribución-NoComercial 4.0 Internacional |
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info:eu-repo/semantics/openAccess |
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