NIPA Corporate Profits and Reported Earnings: A Comparison and Measurement Issues
AbstractThe users of the national income and product accounts (NIPAs) often compare the growth rates of NIPA profit measures with those of other publicly available measures of reported earnings, such as Standard & Poor's 500 earnings. Differences between the NIPA profit measures and the other reported earnings measures reflect differences in purpose, definitions, and methodologies. Reported earnings are used by the Bureau of Economic Analysis, however, in preparing the quarterly estimates of profits, based on the extrapolation of the tax-accounting measures published by the Internal Revenue Service. In recent years there have been large revisions to NIPA corporate profits when tax-return-based measures have become available. Differences between financial accounting and tax accounting in the treatment of employee stock options have contributed to the revisions. This paper explores these differences and examines possible improvements to the methods used for extrapolating NIPA corporate profits estimates that would incorporate more current information on employee stock options.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bureau of Economic Analysis in its series BEA Papers with number 0036.
Date of creation: Jan 2004
Date of revision:
Find related papers by JEL classification:
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Bernstein).
If references are entirely missing, you can add them using this form.