Normalizing method

Definition:

Making a change in the income account equivalent to the tax savings realized through the use of different depreciation methods for shareholder and income tax purposes, thus washing out the benefits of the tax savings reported as final net income to shareholders.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Tax Equity and Fiscal Responsibility Act of 1983

The law requiring federal income tax withholding on payments of dividend and interest to accounts without a certified tax identification number on file. See: W-9.

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!


Create your free portfolio