Assessing the relevance of deferred tax items: Evidence from loss firms during the financial crisis

Angeliki D. Samara

The Journal of Economic Asymmetries, 2014, vol. 11, issue C, 138-145

Abstract: This study examines the information content of deferred tax items for stock prices using two interrelated research settings that are expected to affect it: the financial crisis and incurred loss. It uses a set of Greek listed firms for the period of time after the implementation of the International Financial Reporting Standards (IFRS). Our results indicate that deferred tax items possess information content that investors deem relevant. More specifically, like Dhaliwal, Kaplan, Laux, and Weisbrod (2013), we determined that loss firms have tax items that are perceived by investors as signals of future performance. Moreover, in almost all of the research settings examined, net deferred tax liabilities negatively related to stock prices and this negative effect becomes more pronounced for loss firms during the financial crisis.

Keywords: Deferred tax; Loss firms; Financial crisis (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joecas:v:11:y:2014:i:c:p:138-145

DOI: 10.1016/j.jeca.2014.09.003

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