• Abstract

    THE PERSISTENCE OF BOOK-TAX DIFFERENCES IN BRAZILIAN OPEN COMPANIES FOLLOWING THE ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

    Published date: 07/06/2018
    The persistence of book-tax differences (BTD), i.e., the autocorrelation of this variable between consecutive periods, can be used to identify the persistence of book and tax income together. The fluctuation of these incomes probably increased following the adoption of the International Financial Reporting Standards (IFRS), causing a reduction in the persistence of BTD. However, the effective adoption of the IFRS in the practice of companies in Brazil, a code law country, may take a long time to occur. The objective of this research is to investigate the behavior of the persistence of BTD of Brazilian public companies following the adoption of the IFRS. The sample, composed of 842 observations from the period 2004 to 2015, was tested by the generalized method of moments (GMM) and the autoregressive process AR(1). The results indicate the persistence of the three types of BTD (total, temporary and permanent) in the time horizon of the study. Temporary BTD revealed a lower level of persistence. In addition, the results suggest a reduction in the persistence of the three types of BTD following the adoption of IFRS, with temporary BTD being the most affected. It is inferred that the increase in accounting choices, the responsible subjectivism and the reliable representation inherent to the adoption of the IFRS can cause fluctuations in profits that may reduce the persistence of BTD.

Revista Alcance

Revista Alcance is a Brazilian free access journal, published every four months, linked to the Graduate Program in Administration and the Professional Master’s degree in Administration, Internationalization and Logistics Program of the University of Vale do Itajaí – Univali. We seek to publish theoretical-empirical and technological articles in the areas of Business Administration. Different theoretical and methodological perspectives are welcome, as long as they are consistent with and relevant to the development of the area.

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