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Debt, Performance Pressure and Corporate Deferred Income Tax Assets

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DOI: 10.38007/Proceedings.0001166


Xiaojuan Wu, Yidong Yang, Wenting Cao

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Xiaojuan Wu


Using Chinese A-share listed companies from 2009 to 2018 as research samples, this paper empirically tests the relationship between the degree of corporate debt, performance pressure and corporate deferred income tax assets. The empirical study found that the higher the debt level of listed companies, the more deferred income tax assets are recognized, whether from the perspective of debt level accumulation or incremental perspective, the conclusion is established; at the same time, when enterprises face performance pressure, they tend to recognize more deferred income tax assets to whitewash the financial statements. It shows that there is insufficient prudence in the recognition of deferred income tax assets of enterprises in China. Regulators need to formulate more standardized and detailed recognition criteria and operation guidelines for deferred income tax assets, strengthen supervision, and truly improve the information content of deferred income tax assets.


Debt Level; Performance Pressure; Deferred Income Tax Assets