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The Financial Crisis and the Value-relevance of Recognised Deferred Tax Assets

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  • Wessel M. Badenhorst
  • Petri H. Ferreira

Abstract

type="main"> The objective of this study is to consider if the value-relevance of recognised deferred tax assets, which often represent unused tax losses, was affected by the financial crisis. A regression analysis of a sample of Australian and United Kingdom firms reveals that the value-relevance of recognised deferred tax assets was affected by the financial crisis. However, the impact of the financial crisis differed between the sample countries. The study shows that a plausible explanation for this difference might be found in the tax law of the two countries. Findings of this paper will be of interest to regulators and standard setters, as they highlight how interaction between accounting requirements and tax law affects the relevance of accounting and tax information.

Suggested Citation

  • Wessel M. Badenhorst & Petri H. Ferreira, 2016. "The Financial Crisis and the Value-relevance of Recognised Deferred Tax Assets," Australian Accounting Review, CPA Australia, vol. 26(3), pages 291-300, September.
    • Handle: RePEc:bla:ausact:v:26:y:2016:i:3:p:291-300
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    File URL: http://hdl.handle.net/10.1111/auar.12101
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    Cited by:

    1. Begoña Giner & Francisca Pardo, 2018. "The Value Relevance of Operating Lease Liabilities: Economic Effects of IFRS 16," Australian Accounting Review, CPA Australia, vol. 28(4), pages 496-511, December.
    2. Anna Görlitz & Michael Dobler, 2023. "Financial accounting for deferred taxes: a systematic review of empirical evidence," Management Review Quarterly, Springer, vol. 73(1), pages 113-165, February.
    3. Melik Ertugrul & Volkan Demir, 2018. "How Does Unobserved Heterogeneity Affect Value Relevance?," Australian Accounting Review, CPA Australia, vol. 28(2), pages 288-301, June.

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