The Information Content of the Deferred Tax Valuation Allowance

Krishna R. Kumar · Gnanakumar Visvanathan

61 citations0/0 files storedThe Accounting Review

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Auditing, Earnings Management, Governance Accounting Theory and Financial Reporting Corporate Taxation and Avoidance

Abstract

An event study demonstrates that disclosures of changes in deferred tax valuation allowances (VA) provide information beyond contemporaneous earnings reports. Prior research shows that, in setting VA, managers consider the extent that taxable income is available from various sources for the realization of deferred tax assets (DTA). Our evidence supports a characterization where investors use VA disclosures to infer management's expectations about DTA, its realizability, and future taxable income available for realization. These findings are more generally relevant for assessing the consequences of reporting standards that require or permit management judgment, especially about future outcomes. In particular, they support the view that discretion can be a vehicle for management to communicate expectations to the benefit of investors.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 61 citations exist upstream.

References

1997The conservatism principle and the asymmetric timeliness of earnings1 1996The pricing of discretionary accruals 1996Value-relevance of nonfinancial information: The wireless communications industry 2008Financial Accounting Standards Board (FASB)1996A Market-Based Evaluation of Discretionary Accrual Models 2003Earnings Management: New Evidence Based on Deferred Tax Expense 1987On cross-sectional analysis in accounting research 1994Lack of timeliness and noise as explanations for the low contemporaneuos return-earnings association

Cited by

2010Changes in Unrecognised Deferred Tax Accruals from Carry‐Forward Losses: Earnings Management or Signalling?2011Research in Accounting for Income Taxes 2008Firm and Investor Responses to Uncertain Tax Benefit Disclosure Requirements 2011Is There Information Content in the Tax Footnote?2010Research in Accounting for Income Taxes 2017The Deferred Tax Asset Valuation Allowance and Firm Creditworthiness

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.