scholarly journals Regulatory Capital Planning and Deferred Tax Assets in a Post-Financial Crisis Environment.

2020 ◽  
Author(s):  
Anne C Ehinger ◽  
Evan Eastman ◽  
Cathryn Meegan
Keyword(s):  
Financial Crisis ◽  
Regulatory Capital ◽  
Deferred Tax Assets ◽  
Capital Planning ◽  
Deferred Tax

The Influence of Tax and Nontax Factors on Banks' Choice of Organizational Form

2003 ◽  
Vol 78 (1) ◽  
pp. 297-325 ◽  
Author(s):  
Leslie Hodder ◽  
Mary Lea McAnally ◽  
Connie D. Weaver
Keyword(s):  
Equity Capital ◽  
Income Taxes ◽  
Regulatory Capital ◽  
Strategic Choices ◽  
Deferred Taxes ◽  
Deferred Tax Assets ◽  
State Income ◽  
Deferred Tax ◽  
Tax Loss ◽  
First Time

This paper identifies tax and nontax factors that influence commercial banks' conversion from taxable C-corporation to nontaxable S-corporation from 1997 to 1999, after a 1996 tax-law change allowed banks to convert to S-corporations for the first time. We find that banks are more likely to convert when conversion saves dividend taxes, avoids alternative minimum taxes, and minimizes state income taxes. Banks are less likely to convert when conversion restricts access to equity capital, nullifies corporate tax loss carryforwards, and creates potential penalty taxes on unrealized gains existing at the conversion date. Banks with significant deferred tax assets are less likely to convert, presumably because the write-off of deferred taxes at conversion decreases regulatory capital and exposes the bank to costly regulatory intervention. We also investigate the strategic choices banks make before converting to S-corporations. Converting banks alter their capital structures, deliberately sell appreciated assets, and strategically set dividends to augment net conversion benefits.

scholarly journals Deferred Tax Positions under the Prism of Financial Crisis and the Effects of a Corporate Tax Reform

2015 ◽  
Vol 2 (2) ◽  
pp. 21-58 ◽  
Author(s):  
Evangelos Chytis ◽  
Evangelos Koumanakos ◽  
Spiridon Goumas
Keyword(s):  
Financial Crisis ◽  
Policy Design ◽  
Economic Recession ◽  
Corporate Tax ◽  
Tax Reforms ◽  
Tax Rate ◽  
Deferred Tax Assets ◽  
Corporate Behavior ◽  
Short Run ◽  
Deferred Tax

The effects of corporate tax reforms in reported profits and firms' financial position have been extensively studied in the literature. However, only few studies disaggregate deferred tax items to jointly explore political implications and aspects of corporate behavior around such reforms. Greece's recent financial crisis and economic recession provides an intriguing setting for examining possible incentives and consequences of substantial tax rate changes, such as the 6% increase imposed by the Greek Government in year 2013. Results reveal a totally different picture between financial and non-financial firms, with the former being clearly favored, at least from this short-run effect. These findings seem to coincide with the view that tax policy design is usually shaped by taking into consideration powerful groups' interests. Regarding probable Determinants of Deferred Tax Assets for Tax Loss Carry forwards, the authors find that firms the audit firm may significantly affect recognized amounts due to firm specific internal guidelines and due to the overall quality of the audit.

The Information Content of Tax Loss Carryforwards Before and During the Global Financial Crisis

2018 ◽  
pp. 91-107
Author(s):  
Chytis Evangelos ◽  
Filos Ioannis ◽  
Gkouma Olympia
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Telecommunications Industry ◽  
Deferred Tax Assets ◽  
Before And After ◽  
Tax Payments ◽  
Deferred Tax ◽  
The Global Financial Crisis ◽  
Tax Loss

Tax loss carryforwards are a valuable asset because they usually reduce a company's future tax payments. This chapter investigates the importance of deferred tax assets from tax loss carryforwards (DTA_TLC) by sector and index (FTSE/ASE) for the period before and after the outbreak of the financial crisis (2005-2012). In the non-banking industry, the DTA_TLC cover on average half (1/2) of the total deferred tax assets (DTAs) and one-fifth (1/5) of income before taxes (IBT). The telecommunications industry accounts for the largest DTA_TLC components, while the chemicals sector for the smallest. On average, the companies listed in the FTSE/ASE 20 report DTA_TLC five times larger than those of the FTSE/ASE 40. In the banking sector, until 2009 DTA_TLC constituted a small part of total assets and IBT. In contrast, after 2010, DTAs include significant components of DTA_TLC, as a consequence of the private sector involvement (PSI) and the financial crisis.

The Financial Crisis and the Value-relevance of Recognised Deferred Tax Assets

2016 ◽  
Vol 26 (3) ◽  
pp. 291-300 ◽  
Author(s):  
Wessel M. Badenhorst ◽  
Petri H. Ferreira
Keyword(s):  
Financial Crisis ◽  
Value Relevance ◽  
Deferred Tax Assets ◽  
Deferred Tax

Banks’ deferred tax assets during the financial crisis

2018 ◽  
Vol 53 (2) ◽  
pp. 527-550 ◽  
Author(s):  
J. Douglas Hanna ◽  
Zining Li ◽  
Wayne Shaw
Keyword(s):  
Financial Crisis ◽  
Deferred Tax Assets ◽  
Deferred Tax

scholarly journals Earnings Management Through Deferred Taxes Recognized Under IAS 12: Evidence From Pakistan

2014 ◽  
Vol 3 (1) ◽  
pp. 1-19
Author(s):  
Abdul Rafay Abdul Rafay ◽  
Mobeen Ajmal
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Relevant Information ◽  
Cash Flows ◽  
Deferred Taxes ◽  
Deferred Tax Assets ◽  
Operational Activities ◽  
Deferred Tax ◽  
Relevant Component

This study examines earnings management through deferred taxes calculated under the IAS 12 and its impact on firm valuation. The literature finds that book–tax nonconformity leads to better earning quality and a greater association between earnings and future expected cash flows. Given that Pakistan is a pioneering implementer of the International Financial Reporting Standards, our hypothesis is that the components of deferred tax disclosed under the IAS 12 provide value-relevant information to equity investors. We divide deferred tax components into three categories: those arising from (i) operational activities, (ii) investing activities, and (iii) financing activities. These are subdivided to ensure that no value-relevant component is aggregated with a nonvalue-relevant component, which might otherwise lead to an information slack. Our sample includes data on shariah-compliant companies listed on the Karachi Meezan Index (KMI-30). We find that deferred tax line items in firms’ balance sheets are reflected in market prices. Investors also tend to treat deferred tax line items (arising from operating, financing, and investing activities) differently. Furthermore, the value relevance is dissimilar for different components of deferred tax. Investors are wary of deferred tax assets and liabilities when pricing and are likely to penalize firms with a higher deferred tax position.

Sign in / Sign up

Export Citation Format

Share Document