Abstract

http://ssrn.com/abstract=112188
 
 

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Determinants of the Valuation Allowance for Deferred Tax Assets Under SFAS No. 109


Gregory S. Miller


University of Michigan, Stephen M. Ross School of Business

Douglas J. Skinner


The University of Chicago - Booth School of Business


The Accounting Review, Vol 73, No 2, April 1998

Abstract:     
This paper explores the determinants of the valuation allowance for deferred tax assets under SFAS No. 109. We find that, consistent with SFAS No. 109, the allowance is larger for firms with relatively more deferred tax assets and smaller for firms with higher levels of expected future taxable income. The most important explanatory variable for the valuation allowance is the level of firms' tax credit and tax loss carryforwards, consistent with these items being more difficult to realize. We find little evidence that managers use the valuation allowance for earnings management purposes, although these tests may not be very powerful.

JEL Classification: M41, M43, M44

Accepted Paper Series





Not Available For Download

Date posted: August 3, 1998  

Suggested Citation

Miller, Gregory S. and Skinner, Douglas J., Determinants of the Valuation Allowance for Deferred Tax Assets Under SFAS No. 109. The Accounting Review, Vol 73, No 2, April 1998. Available at SSRN: http://ssrn.com/abstract=112188

Contact Information

Gregory S. Miller
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
Douglas J. Skinner (Contact Author)
The University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7137 (Phone)

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