Faculty Publications

Title

Balance sheet classification and the valuation of deferred taxes

Document Type

Article

Keywords

Balance sheet classification, Deferred taxes, Investors

Journal/Book/Conference Title

Research in Accounting Regulation

Volume

28

Issue

2

First Page

77

Last Page

85

Abstract

The Financial Accounting Standards Board recently issued Accounting Standards Update 2015–17, which will require firms to classify all deferred tax assets and liabilities as noncurrent in classified balance sheets instead of separating them into current and noncurrent amounts. This change is designed to simplify the reporting of deferred taxes and align with International Financial Reporting Standards. This study conducts empirical analyses on a broad cross-section of publicly traded U.S. firms in order to examine the stock market's valuation of current and noncurrent deferred tax assets and liabilities. The results suggest that classifying all deferred taxes as noncurrent may adversely affect the usefulness of financial statements for equity investors.

Original Publication Date

10-1-2016

DOI of published version

10.1016/j.racreg.2016.09.004

Repository

UNI ScholarWorks, Rod Library, University of Northern Iowa

Language

en

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