Firm Life Cycle, Book-Tax Differences and Earnings Persistence

Authors

  • Antonio Lopo Martinez Ph.D. in Controllership and Accounting from University of São Paulo (USP)
  • Márcio Bassetti Professor at Faculdade Capixaba de Nova Venécia

DOI:

https://doi.org/10.17524/repec.v10i2.1312

Keywords:

Life cycle, Book-tax differences, Earnings persistence.

Abstract

The objective in this study is to show if the life cycle explains the relation between the Book-Tax Differences (BTDs) and earnings persistence, as well as to inform on the future gains and their relation with the BTDs. Therefore, univariate tests were applied to verify the differences between the mean BTDS, life cycle stages and regression coefficient for the Earnings Before Income Tax (EBIT). The study focused on Brazilian publicly traded companies between 2009 and 2013. The results indicated that the control of earnings persistence was related with the stages of the life cycle. The information relevance of the life cycle and the Book-Tax Differences for earnings persistence is registered. In conclusion, the firm life cycle should be included in the analysis of the relation between the BTDs and earnings persistence. The evidence registered here is crucial to identify the quality of the earnings and incorporate them into earnings valuation models.

Author Biographies

Antonio Lopo Martinez, Ph.D. in Controllership and Accounting from University of São Paulo (USP)

Associate professor at Fucape Business School

Márcio Bassetti, Professor at Faculdade Capixaba de Nova Venécia

M.Sc. in Accounting from Fucape Business School

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Published

2016-06-12

How to Cite

Martinez, A. L., & Bassetti, M. (2016). Firm Life Cycle, Book-Tax Differences and Earnings Persistence. Journal of Education and Research in Accounting (REPeC), 10(2). https://doi.org/10.17524/repec.v10i2.1312

Issue

Vol. 10 No. 2 (2016): APRIL-JUNE

Section

Articles

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