Although deferred tax liabilities (DTLs) represent a significant financial statement liability for most firms, research provides mixed evidence concerning investors' valuation of these items. Using an expanded dataset of hand-collected tax footnotes, I find evidence suggesting that investors...

Effective tax rates (ETRs) are often used to compare tax avoidance across firms and time. Using firms' detailed tax footnote data, we find that the effect of valuation allowances (VA) related to prior-period losses biases GAAP ETRs. This downward bias explains almost all of the downward trend in...