Value Correlation of Deferred Income Tax In Industrialization

Abstract

This paper collects 2670 deferred income tax samples from 211 listed industrial companies that have been surviving and continuously disclosing deferred income tax accounting information from 2007 to 2019. On the basis of ohlson model, earnings per share and net flow of operating activities per share are added as adjustment variables to analyze the impact of deferred income tax on stock prices. The results show that:(1) In the long run, DTAs are positively correlated with enterprise stock prices, while DTLs are negatively correlated with enterprise stock prices; (2) After adding the adjustment variable earnings per share, it is found that when EPS level is high, DTAs have a slightly downward negative impact on stock prices, while DTLs have little negative impact on stock prices. When EPS level is low, DTAs have a positive impact on stock prices, while lower earnings per share will accelerate the negative impact of DTLs on stock prices. (3) After adding the adjustment variable CFO, it is found that only when the CFO is sufficient, DTAs are really good news. It has a positive impact on stock price. If the CFO is poor, the positive impact of recognized DTAs on stock price is almost zero. In addition, when the CFO is high, the negative impact of DTLs on price will be accelerated.