Affiliation:
1. The Pennsylvania State University
Abstract
ABSTRACT
This study empirically examines whether deferred taxes provide incremental information about future tax payments and explores whether the relationship is affected by whether and when the deferred tax accounts reverse. The analysis provides evidence that while deferred taxes do provide incremental information about future tax payments, the magnitude of the information is small. Further, consistent with theoretical predictions (Guenther and Sansing 2000, 2004; Dotan 2003) the analysis demonstrates there is an asymmetrical association between deferred taxes and future tax payments. For instance, deferred taxes associated with temporary differences that are included in GAAP income prior to taxable income are associated with future tax payments. In contrast, deferred taxes associated with temporary differences that are included in GAAP income after taxable income are not associated with future tax payments. Finally, the analysis provides evidence that growth in the deferred tax balances does not defer future tax payments.
Data Availability: The data are available from public sources.
Publisher
American Accounting Association
Subject
Economics and Econometrics,Finance,Accounting
Reference31 articles.
1. Accounting Principles Board (APB).. 1967. Accounting for Income Taxes. Accounting Principles Board Opinion No. 11 . New York, NY : APB .
2. The valuation of deferred taxes;Amir;Contemporary Accounting Research,1997
3. The aggregation and valuation of deferred taxes;Amir;Review of Accounting Studies,2001
4. Deferred tax accounting under SFAS No. 109: An empirical investigation of its incremental value-relevance relative to APB No. 11;Ayers;The Accounting Review,1998
5. Accruals and the prediction of future cash flows;Barth;The Accounting Review,2001
Cited by
36 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献