The Recognition and Timing of Deferred Tax Liabilities

30 Pages Posted: 25 Sep 2004

See all articles by Ann Gaeremynck

Ann Gaeremynck

KU Leuven

Linda M. Van De Gucht

KU Leuven - Department of Applied Economics

Abstract

This paper examines the characteristics of firms that account for deferred tax liabilities related to government investment grants under an extended adoption timing period. Not only the recognition but also the timing decision is associated with changes in future performance and changes in the debt structure. Recognisers outperform non-recognisers in the future, while early recognition is related to post recognition performance but only for those firms that currently perform well. Changes in the balance sheet structure are also related to both decisions. Firms with recent increases in the debt level tend to postpone recognition, while currently well-performing firms that increase their future debt level are less likely to recognise deferred taxes.

JEL Classification: H25, M41, M43, M47, G32

Suggested Citation

Gaeremynck, Ann and Van De Gucht, Linda M., The Recognition and Timing of Deferred Tax Liabilities. Available at SSRN: https://ssrn.com/abstract=591496

Ann Gaeremynck (Contact Author)

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant B-3000
Belgium
3216326921 (Phone)

Linda M. Van De Gucht

KU Leuven - Department of Applied Economics ( email )

Naamsestraat 69
B-3000 Leuven
BELGIUM

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