Abstract

http://ssrn.com/abstract=1759266
 
 

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Is There Information Content in the Tax Footnote?


Jana Smith Raedy


University of North Carolina at Chapel Hill

Jeri K. Seidman


University of Texas at Austin - McCombs School of Business

Douglas A. Shackelford


University of North Carolina Kenan-Flagler Business School; National Bureau of Economic Research (NBER)

February 10, 2011

2011 American Taxation Association Midyear Meeting Paper: JATA Conference
McCombs Research Paper Series No. ACC-01-11

Abstract:     
Prior studies show that aggregated book-tax differences have information content that is incremental to pre-tax book income. We test whether the detailed book-tax difference disclosures from statements of deferred tax position and rate reconciliations have information content that is incremental to the aggregate book-tax difference. Using hand-collected data from the Fortune 250 from 1993 to 2007, we find little evidence that the equity markets price different book-tax differences differently, consistent with no incremental information content. Further work is needed to explain why the sum of the book-tax differences matter to investors, but the parts do not.

Number of Pages in PDF File: 51

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Date posted: February 11, 2011 ; Last revised: September 20, 2012

Suggested Citation

Raedy, Jana Smith and Seidman, Jeri K. and Shackelford, Douglas A., Is There Information Content in the Tax Footnote? (February 10, 2011). 2011 American Taxation Association Midyear Meeting Paper: JATA Conference; McCombs Research Paper Series No. ACC-01-11. Available at SSRN: http://ssrn.com/abstract=1759266 or http://dx.doi.org/10.2139/ssrn.1759266

Contact Information

Jana Smith Raedy
University of North Carolina at Chapel Hill ( email )
McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-7475 (Phone)
919-962-4727 (Fax)

Jeri K. Seidman
University of Texas at Austin - McCombs School of Business ( email )
Austin, TX 78712
United States
Douglas A. Shackelford (Contact Author)
University of North Carolina Kenan-Flagler Business School ( email )
Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States
919-962-3197 (Phone)
919-962-4727 (Fax)

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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