Financial accounting for deferred taxes: a systematic review of empirical evidence

Research output: Contribution to journalResearch articleContributedpeer-review



Deferred taxes—resulting from differences between financial and tax accounts—have been a long-standing, contentious issue in financial accounting regulation, practice, and research. Debates on concepts and standards have been accompanied by doubts around whether and the extent to which deferred taxes provide relevant information for financial statement users and are employed by firms to manage their earnings. This paper systematically reviews the body of empirical evidence that has emerged over the last three decades on deferred taxes in the fields of value relevance and earnings management. A bibliographic analysis and a narrative synthesis are presented within a thematic categorization framework. Key results indicate that existing research focuses on the US setting. There is substantial evidence for the value relevance of various deferred tax items but limited evidence that firms use deferred taxes to manage their earnings. The findings suggest implications for both future research and the regulatory debate.


Original languageEnglish
Pages (from-to)113-165
Number of pages53
JournalManagement Review Quarterly
Issue number1
Publication statusPublished - Feb 2023

External IDs

Scopus 85115774430
Mendeley 9acc21c7-078b-376a-b870-ed27be7716fe


DFG Classification of Subject Areas according to Review Boards


  • Deferred taxes, Income taxes, International Financial Reporting Standards (IFRS), US Generally Accepted Accounting Principles (US GAAP), International Financial Reporting Standards, Earnings management, US Generally Accepted Accounting Principles, Value relevance, Earnings management, Value relevance