Value Relevance and Components of Deferred Tax Assets and Liabilities: Evidence from the Listed Companies on SET 100 in Thailand

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Kittima Acaranupong


This paper examines the components of deferred tax assets and liabilities
for early adopters of the proposed Thai Accounting Standard (TAS) No. 12
Income Taxes which is expected to be adopted in 2013. It also investigates
the value relevance of deferred tax assets and liabilities information for
early adopters and non-early adopters of the proposed standard. The result
indicates that the main components of deferred tax assets are taxable loss
carryforward while those of deferred tax liabilities are deprecation. Using
the Feltham- Ohlson (1995) Model for the period from 2004 to 2008, this
research reveals that deferred tax assets and deferred tax liabilities are
value relevant information for early adopters whilst only deferred tax assets
are value relevant information for non-early adopters. The results from this
study also support the notion that the adoption of International Accounting
Standards (IAS) and International Financial Reporting Standards (IFRS) in
Thailand will improve the relevance of financial statements. Furthermore,
it will enhance the comparability of the financial statements of the Thai
listed companies with that of listed companies in foreign countries.


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