01526nas a2200145   4500008004100000245005500041210005400096260002000150490000700170520107200177653001501249100001701264700001101281856008801292       2018                        eng d00aBook-Tax Differences and the Costs of Private Debt0 aBookTax Differences and the Costs of Private Debt  aAmsterdamc20180 v423 aIn this study, we test for associations between measures of book-tax differences (BTDs) and measures of private bank loan costs. Our measures of bank loan costs are: (1) interest rate spreads, and (2) security requirements. Initial results suggest a positive association between variability in total BTDs, but not levels, and private debt costs. After decomposing BTDs into their permanent and temporary components, we find that temporary BTDs (levels and variability) are consistently positively associated with costs of private debt, whereas permanent BTDs are not. Further, we find that the positive relation between BTDs and costs of private debt is attenuated for high-tax-planning firms and is stronger for loan facilities in which leading lenders have high market shares. Consistent with the findings of Ayers et al. (2010), we interpret these results as indicative of BTDs generally impacting the precision of the information conveyed in the financial statements, raising concerns about earnings quality, except where the BTDs likely result from tax planning.10aAccounting1 aMoore, Jared1 aXu, Li  u/biblio/book-tax-differences-and-costs-private-debt