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Kim Mear

Doctor of Philosophy, (Accounting)
Study Completed: 2017
Massey Business School


Thesis Title
Information Relevance of Deferred Tax

Read article at Massey Research Online: MRO icon

Accounting for deferred tax continues to be controversial. The research undertaken by the International Accounting Standards Board (IASB) identifies issues arising from applying International Accounting Standard 12: Income Taxes. IASB suggests fundamentally changing the main principle of the standard, that is, changing from the balance sheet liability method to another method of calculating deferred tax. Ms Mear investigated the information relevance of three methods of accounting for deferred tax, the comprehensive and partial basis, and the balance sheet method. Information relevance has two components; predictability and value relevance. Ms Mear collected financial information from firms listed on the NZ Stock Exchange to examine whether deferred tax assisted in predicting future tax payments and if it was value relevant under each deferred tax method. She found that the comprehensive basis was the only method that was information relevant. Her research provides valuable insight into the understanding of accounting for deferred taxes.

Professor Michael Bradbury
Professor Jill Hooks

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