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Comprehensive versus partial deferred tax liabilities and equity market values

Comprehensive versus partial deferred tax liabilities and equity market values This study investigates the value relevance of the deferred tax liability recognized using comprehensive versus partial allocation. Our research examines New Zealand firms who, prior to the introduction of International Financial Reporting Standards, were free to choose between comprehensive and partial allocation. We test the joint hypothesis that the partial, as opposed to comprehensive, deferred tax liability is relevant for equity valuation and is sufficiently reliable to be reflected in investors’ valuation assessments. Our results are consistent with this prediction. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

Comprehensive versus partial deferred tax liabilities and equity market values

Accounting & Finance , Volume 51 (4) – Dec 1, 2011

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References (33)

Publisher
Wiley
Copyright
© 2011 The Authors. Accounting and Finance © 2011 AFAANZ
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/j.1467-629X.2011.00430.x
Publisher site
See Article on Publisher Site

Abstract

This study investigates the value relevance of the deferred tax liability recognized using comprehensive versus partial allocation. Our research examines New Zealand firms who, prior to the introduction of International Financial Reporting Standards, were free to choose between comprehensive and partial allocation. We test the joint hypothesis that the partial, as opposed to comprehensive, deferred tax liability is relevant for equity valuation and is sufficiently reliable to be reflected in investors’ valuation assessments. Our results are consistent with this prediction.

Journal

Accounting & FinanceWiley

Published: Dec 1, 2011

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