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In some countries, payments of bonuses to directors may be deducted directly from retained earnings...

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Accounting

In some countries, payments of bonuses to directors may be deducted directly from retained earnings rather than being charges to income of the year. In your opinion, does this treatment make it more or less likely that bonuses will be paid to directors? Can accounting standards be neutral in their impact on economic decision making by companies? Should they be neutral?

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