Valuation of tax expense

• 成果类型: Article
• 署名作者: Thomas, Jacob; Zhang, Frank
• 署名单位: Yale University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-013-9274-3
• 发表日期: 2014
• 页码: 1436-1467
• 关键词: sfas no. 109; earnings management; taxable income; information-content; FUTURE EARNINGS; analysts; returns

摘要

As tax expense reflects value lost to taxes paid, it should be negatively associated with value, provided nontax, value-relevant information is controlled for. However, valuation regressions estimated in prior research-using contemporaneous tax expense and nontax variables-document substantial variation in the coefficients on tax expense, ranging from significant negative to significant positive values. We show this variation is (a) caused by the omission of expected future profitability, and (b) explained by many factors that cause variation in the correlations among included variables and omitted future profitability. Unfortunately, difficulties associated with separating the impact of individual factors hampers tax research investigating determinants of the value relevance of tax expense.