The Information Content of Deferred Taxes Under IFRS

Vanessa Flagmeier

European Accounting Review, 2022, vol. 31, issue 2, 495-518

Abstract: As prior evidence on deferred taxes under IFRS is scarce and inconclusive, this study examines whether deferred taxes reported in a German conservative accounting environment have information content. To improve informativeness, I propose a new split into four deferred tax categories. Applying this split, I replicate prior literature’s value relevance tests. Next, I examine whether the (lack of) value relevance can be explained by predictive ability. My findings indicate that aggregate deferred taxes are value relevant and that the new split informs about the drivers of this value relevance. It further helps to disentangle value relevance and predictive ability which do not always go hand in hand. Taken together, my results suggest that applying the new categorization improves the information content of deferred taxes.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/09638180.2020.1826338 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:euract:v:31:y:2022:i:2:p:495-518

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REAR20

DOI: 10.1080/09638180.2020.1826338

Access Statistics for this article

European Accounting Review is currently edited by Laurence van Lent

More articles in European Accounting Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().