When the U.S. corporate income tax rate was increased from 34 to 35 percent in August 1993, corporations had to remeasure their deferred tax assets and liabilities and include the net adjustment in their 1993 third-quarter earnings. This study shows that, at the time of the earnings...

This study examines analyst forecast revisions after the disclosure of firms' deferred tax adjustments following the U.S. Omnibus Budget Reconciliation Act of 1993 (OBRA), which raised the corporate income tax rate from 34% to 35%. This deferred tax adjustment was a one-time item, and should...