Permanently Reinvested Foreign Earnings, Taxes, and Earnings Management
研究企业是否利用“永久性再投资”指定来管理报告盈余，以及该指定是否反映再投资激励。发现PRE变化与分析预测和税前盈余之差正相关，与再投资激励相关。
Firms can delay financial statement recognition of U.S. taxes on repatriations by designating foreign subsidiary earnings as “permanently reinvested” under APB Opinion No. 23. This paper examines (1) whether firms use the permanently reinvested earnings (PRE) designation to manage reported earnings, and (2) whether amounts reported as permanently reinvested reflect investment and tax incentives to reinvest foreign subsidiary earnings abroad. Consistent with the prediction that firms use PRE to manage earnings, year-to-year changes in amounts reported as PRE are positively related to the difference between analyst forecasts and pre-managed earnings. Additionally, changes in reported PRE are positively related to the difference between the foreign and domestic after-tax return on assets and negatively related to the tax benefit of deductible repatriations, thus reflecting investment and tax incentives to reinvest abroad.