Does Book-Tax Difference Influence the Value Relevance of Book Income? Empirical Evidence from Japan

Q3 Economics, Econometrics and Finance

Academy of Accounting and Financial Studies Journal Pub Date : 2016-12-01 DOI:10.2139/SSRN.2615213

A. Yamada

{"title":"Does Book-Tax Difference Influence the Value Relevance of Book Income? Empirical Evidence from Japan","authors":"A. Yamada","doi":"10.2139/SSRN.2615213","DOIUrl":null,"url":null,"abstract":"This paper analyzes the effects of the book-tax difference (BTD) on accounting accruals and value relevance. Recent studies argued that book-tax conformity increases earnings quality. However, other studies argued that book-tax conformity decreases earnings quality. The previous studies failed to isolate the components of BTD, and they did not consider the design of the operation of accounting or tax systems, which is the reason for the conflicting results. This paper isolates the elements of BTD and compares these elements and similar items. In addition, this paper focuses on the timing of changing accounting and tax systems. We predict and find that (1) large discretionary book-only accruals (DBOA) reduce the value relevance of earnings, (2) the value relevance of firms with large non-discretionary book-only accruals (NBOA) are higher than other firms. However, this result is not clear from a comparison of the value relevance of firms with large non-discretionary book-tax accruals (NBTA), and (3) the relationship between BTD and value relevance depends on the accounting system and the taxation system.","PeriodicalId":39296,"journal":{"name":"Academy of Accounting and Financial Studies Journal","volume":"20 1","pages":"123"},"PeriodicalIF":0.0000,"publicationDate":"2016-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Academy of Accounting and Financial Studies Journal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/SSRN.2615213","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Economics, Econometrics and Finance","Score":null,"Total":0}

引用次数: 2

Abstract

This paper analyzes the effects of the book-tax difference (BTD) on accounting accruals and value relevance. Recent studies argued that book-tax conformity increases earnings quality. However, other studies argued that book-tax conformity decreases earnings quality. The previous studies failed to isolate the components of BTD, and they did not consider the design of the operation of accounting or tax systems, which is the reason for the conflicting results. This paper isolates the elements of BTD and compares these elements and similar items. In addition, this paper focuses on the timing of changing accounting and tax systems. We predict and find that (1) large discretionary book-only accruals (DBOA) reduce the value relevance of earnings, (2) the value relevance of firms with large non-discretionary book-only accruals (NBOA) are higher than other firms. However, this result is not clear from a comparison of the value relevance of firms with large non-discretionary book-tax accruals (NBTA), and (3) the relationship between BTD and value relevance depends on the accounting system and the taxation system.

查看原文本刊更多论文

账面税收差异是否影响账面收益的价值相关性?来自日本的经验证据

本文分析了账面税差(BTD)对会计应计项目和价值相关性的影响。最近的研究表明，账面税收一致性提高了盈利质量。然而，其他研究认为，账面税收一致性降低了盈余质量。以往的研究未能分离出BTD的组成部分，也没有考虑会计或税收制度运行的设计，这是导致结果相互矛盾的原因。本文分离了BTD的要素，并将这些要素与类似项目进行了比较。此外，本文还着重讨论了会计和税收制度变化的时机。我们预测并发现:(1)大额可自由支配的账面应计利润(DBOA)降低了盈余的价值相关性，(2)大额非可自由支配的账面应计利润(NBOA)的公司价值相关性高于其他公司。然而，从具有大量非可支配账面应计税(NBTA)的公司的价值相关性的比较中，这一结果并不清楚，并且(3)BTD和价值相关性之间的关系取决于会计制度和税收制度。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Academy of Accounting and Financial Studies Journal Economics, Econometrics and Finance-Economics and Econometrics

自引率

0.00%

发文量

期刊介绍： Academy of Accounting and Financial Studies Journal (AAFSJ) is a professional periodical that offers open access forum to publish the latest and most relevant research innovations in this field. Affiliated to the Allied Academy publications, the journal adheres to double blind peer review to ensure the originality and quality of the publication.