Deferred Tax Asset Revaluations, Costly Information Processing, and Bank Deposits: Evidence from the Tax Cuts and Jobs Act

References

• Acharya VV, Ryan SG (2016) Banks’ financial reporting and financial system stability. J. Accounting Res. 54(2):277–340.Crossref, Google Scholar
• Badertscher BA, Burks JJ, Easton PD (2018) The market reaction to bank regulatory reports. Rev. Accounting Stud. 23(2):686–731.Crossref, Google Scholar
• Baer H, Brewer E (1986) Uninsured deposits as a source of market discipline. Some new evidence. Econom. Perspective 10(Sep):23–31.Google Scholar
• Balakrishnan K, Blouin JL, Guay WR (2019) Tax aggressiveness and corporate transparency. Accounting Rev. 94(1):45–69.Crossref, Google Scholar
• Banerjee S, Breon-Drish B, Engelberg J (2020) Discussion of “disclosure processing costs, investors’ information choice, and equity market outcomes: A review”. J. Accounting Econom. 70(2–3):101337.Crossref, Google Scholar
• Barber BM, Odean T (2008) All that glitters: The effect of attention and news on the buying behavior of individual and institutional investors. Rev. Financial Stud. 21(2):785–818.Crossref, Google Scholar
• Beatty A, Liao S (2014) Financial accounting in the banking industry. A review of the empirical literature. J. Accounting Econom. 58(2–3):339–383.Crossref, Google Scholar
• Bischor J, Foos D, Riepe J (2023) Does greater transparency discipline the loan loss provisioning of privately held banks? Eur. Accounting Rev., ePub ahead of print October 4, https://doi.org/10.1080/09638180.2023.2277327.Google Scholar
• Blankespoor E (2019) The impact of information processing costs on firm disclosure choice: Evidence from the XBRL mandate. J. Accounting Res. 57(4):919–967.Crossref, Google Scholar
• Blankespoor E, deHaan E, Zhu C (2018) Capital market effects of media synthesis and dissemination: Evidence from robo-journalism. Rev. Accounting Stud. 23(1):1–36.Crossref, Google Scholar
• Blankespoor E, deHaan E, Marinovic I, Marinovic I (2020) Disclosure processing costs, investors’ information choice, and equity market outcomes: A review. J. Accounting Econom. 70(2–3):1–123.Crossref, Google Scholar
• Blankespoor E, deHaan E, Wertz J, Zhu C (2019) Why do individual investors disregard accounting information? The roles of information awareness and acquisition costs. J. Accounting Res. 57(1):53–84.Crossref, Google Scholar
• Bloomberg News (2023) Thiel’s founders fund withdrew millions from Silicon Valley Bank. Bloomberg.com (March 11), https://www.bnnbloomberg.ca/thiel-s-founders-fund-withdrew-millions-from-silicon-valley-bank-1.1894053.Google Scholar
• Brown M, Trautmann ST, Vlahu R (2017) Understanding bank-run contagion. Management Sci. 63(7):2272–2282.Link, Google Scholar
• Brushwood JD, Hall CM, Rapley ET (2020) Unintended costs of a dual regulatory environment: Evidence from state-level cannabis legalization and bank audit fees. J. Accounting Public Policy 39(3):106736.Google Scholar
• Bushee BJ, Core JE, Guay W, Hamm SJW (2010) The role of the business press as an information intermediary. J. Accounting Res. 48(1):1–19.Crossref, Google Scholar
• Bushman RM (2014) Thoughts on financial accounting and the banking industry. J. Accounting Econom. 58(2–3):384–395.Crossref, Google Scholar
• Bushman RM, Williams CD (2015) Delayed expected loss recognition and the risk profile of banks. J. Accounting Res. 53(3):511–553.Crossref, Google Scholar
• Bushman RM, Gigler F, Indjejikian RJ (1996) A model of two-tiered financial reporting. J. Accounting Res. 34:51.Crossref, Google Scholar
• Calomiris CW, Khan CM (1991) The role of demandable debt in structuring optimal banking arrangements. Amer. Econom. Rev. 81(3):497–513.Google Scholar
• Chaisemartin C de, D’HaultfŒuille X (2018) Fuzzy differences-in-differences. Rev. Econom. Stud. 85(2):999–1028.Crossref, Google Scholar
• Chari VV, Jagannathan R (1988) Banking panics, information, and rational expectations equilibrium. J. Finance 43(3):749–761.Crossref, Google Scholar
• Chen Y (1999) Banking panics: The role of the first‐come, first‐served rule and information externalities. J. Political Econom. 107(5):946–968.Crossref, Google Scholar
• Chen N, Koester A (2021) Analysts’ GAAP earnings forecast quality. Working paper, University of Houston, Houston.Google Scholar
• Chen Q, Goldstein I, Huang Z, Vashishtha R (2022) Bank transparency and deposit flows. J. Financial Econom. 146(2):475–501.Crossref, Google Scholar
• Collins DW, Gong G, Hribar P (2003) Investor sophistication and the mispricing of accruals. Rev. Accounting Stud. 8(2/3):251–276.Crossref, Google Scholar
• Cook DO, Spellman LJ (1994) Repudiation risk and restitution costs: Toward understanding premiums on insured deposits. J. Money Credit Bank. 26(3):439.Crossref, Google Scholar
• Dang TV, Gorton G, Holmström B, Ordoñez G (2017) Banks as secret keepers. Amer. Econom. Rev. 107(4):1005–1029.Crossref, Google Scholar
• Dhaliwal AS, Kaplan SE, Laux RC, Weisbrod E (2013) The information content of tax expense for firms reporting losses. J. Accounting Res. 51(1):135–164.Crossref, Google Scholar
• Diamond DW, Dybvig PH (1983) Bank runs, deposit insurance, and liquidity. J. Political Econom. 91(3):401–419.Crossref, Google Scholar
• Dichev ID, Tang VW (2008) Matching and the changing properties of accounting earnings over the last 40 years. Accounting Rev. 83(6):1425–1460.Crossref, Google Scholar
• Ellis DM, Flannery MJ (1992) Does the debt market assess large banks’ risk? J. Monetary Econom. 30(3):481–502.Crossref, Google Scholar
• Engelberg JE, Parsons CA (2011) The causal impact of media in financial markets. J. Finance 66(1):67–97.Crossref, Google Scholar
• FDIC (2014) FDIC consumer news. 5 common misconceptions about FDIC insurance…and the real facts. Accessed March 20, 2024, https://www.fdic.gov/consumers/consumer/news/cnfall14/misconceptions.html.Google Scholar
• FDIC (2021) Unsafe and unsound banking practices: Brokered deposits and interest rate restrictions. 12 CFR Parts 303 and 337. Federal Register 86(13).Google Scholar
• FDIC (2022) Quarterly banking profile: Fourth quarter 2022. Accessed March 20, 2024, https://www.fdic.gov/analysis/quarterly-banking-profile/index.html.Google Scholar
• Flannery MJ (2001) The faces of “market discipline”. J. Financial Service Res. 20(2/3):107–119.Crossref, Google Scholar
• Gaertner FB, Lynch DP, Vernon ME (2020) The effects of the tax cuts and jobs act of 2017 on defined benefit pension contributions. Contemporary Accounting Res. 35(2):589.Google Scholar
• Gaynor LM, McDaniel L, Yohn TL (2011) Fair value accounting for liabilities: The role of disclosures in unraveling the counterintuitive income statement effect from credit risk changes. Accounting Organ. Soc. 36(3):125–134.Crossref, Google Scholar
• Goldstein I, Pauzner A (2005) Demand-deposit contracts and the probability of bank runs. J. Finance 60(3):1293–1327.Crossref, Google Scholar
• Govindarajan V, Rajgopal S, Srivastava A (2018) A blueprint for digital companies’ financial reporting. Harvard Bus. Rev. Accessed March 20, 2024, https://hbr.org/2018/08/a-blueprint-for-digital-companies-financial-reporting.Google Scholar
• Graham JR, Harvey CR, Rajgopal S (2005) The economic implications of corporate financial reporting. J. Accounting Econom. 40(1–3):3–73.Crossref, Google Scholar
• Graham JR, Raedy JS, Shackelford DA (2012) Research in accounting for income taxes. J. Accounting Econom. 53(1–2):412–434.Crossref, Google Scholar
• Green J, Louis H, Sani J (2022) Intangible investments, scaling, and the trend in the accrual–cash flow association. J. Accounting Res. 60(4):1551–1582.Crossref, Google Scholar
• Gu F, Lev BI, Zhu C (2021) All Losses Are Not Alike: Real vs. Accounting-Driven Reported Losses (NYU Stern School of Business, New York).Google Scholar
• Guest NM (2021) The information role of the media in earnings news. J. Accounting Res. 59(3):1021–1076.Crossref, Google Scholar
• Hanna JD, Li Z, Shaw W (2019) Banks’ deferred tax assets during the financial crisis. Rev. Quant. Finance Accounting 53(2):527–550.Crossref, Google Scholar
• Heese J, Pérez-Cavazos G, Peter CD (2022) When the local newspaper leaves town: The effects of local newspaper closures on corporate misconduct. J. Financial Econom. 145(2):445–463.Crossref, Google Scholar
• Herbohn K, Tutticci I, Khor PS (2010) Changes in unrecognised deferred tax accruals from carry-forward losses: Earnings management or signalling? J. Bus. Finance Accounting 37(7–8):763–791.Crossref, Google Scholar
• Hutchens M, Lynch D, Stomberg B (2024) Sharing the wealth. The effects of TCJA bonuses on employee pay satisfaction. J. Amer. Taxation Assoc., ePub ahead of print January 09, https://doi.org/10.2308/JATA-2022-028.Google Scholar
• IFRS Foundation (2019) General Presentation and Disclosures. Comments to be Received by 30 June 2020 (IFRS Foundation, London).Google Scholar
• Iyer R, Puri M (2012) Understanding bank runs. The importance of depositor-bank relationships and networks. Amer. Econom. Rev. 102(4):1414–1445.Crossref, Google Scholar
• Iyer R, Puri M, Ryan N (2016) A tale of two runs. Depositor responses to bank solvency risk. J. Finance 71(6):2687–2726.Crossref, Google Scholar
• Jacklin CJ, Bhattacharya S (1988) Distinguishing panics and information-based bank runs: Welfare and policy implications. J. Political Econom. 96(3):568–592.Crossref, Google Scholar
• Kahneman D (2012) Thinking, Fast and Slow. Penguin Psychology (Penguin Books, London).Google Scholar
• Klingler R (2017) Basel III treatment of DTAs and MSAs. Accessed March 20, 2024, https://bankbclp.com/2017/10/basel-iii-proposed-simplification-dta-msa-treatment.Google Scholar
• Lachmann M, Stefani U, Wöhrmann A (2015) Fair value accounting for liabilities: Presentation format of credit risk changes and individual information processing. Accounting Organ. Soc. 41:21–38.Crossref, Google Scholar
• Laux RC (2013) The association between deferred tax assets and liabilities and future tax payments. Accounting Rev. 88(4):1357–1383.Crossref, Google Scholar
• Lerman A (2020) Individual investors’ attention to accounting information: Evidence from online financial communities. Contemporary Accounting Res. 47(4):2020–2057.Crossref, Google Scholar
• Liang PJ, Zhang G (2019) On the social value of accounting objectivity in financial stability. Accounting Rev. 94(1):229–248.Crossref, Google Scholar
• Maechler AM, McDill KM (2006) Dynamic depositor discipline in US banks. J. Bank. Finance 30(7):1871–1898.Crossref, Google Scholar
• Martin C, Puri M, Ufier A (2018) Deposit inflows and outflows in failing banks: The role of deposit insurance. FDIC; Center for Financial Research (CFR) Working Paper Series (FDIC CFR WP 2018-02), Duke University, FDIC, and NBER, Washington, DC.Google Scholar
• Mercator Advisory Group (2019) ATM banking. It’s not just about cash withdrawal anymore. Accessed March 20, 2024, https://www.mercatoradvisorygroup.com/product/ATM-Banking:-Its-Not-Just-About-Cash-Withdrawal-Anymore/.Google Scholar
• Morris S, Shin HS (2002) Social value of public information. Amer. Econom. Rev. 92(5):1521–1534.Crossref, Google Scholar
• Park S (1995) Market discipline by depositors: Evidence from reduced-form equations. Quart. Rev. Econom. Finance 35:497–514.Crossref, Google Scholar
• Pincus M, Rajgopal S, Venkatachalam M (2007) The accrual anomaly: International evidence. Accounting Rev. 82(1):169–203.Crossref, Google Scholar
• Poterba JM, Rao NS, Seidman JK (2011) Deferred tax positions and incentives for corporate behavior around corporate tax changes. National Tax J. 64(1):27–57.Crossref, Google Scholar
• Rouen E, So EC, Wang CCY (2021) Core earnings: New data and evidence. J. Financial Econom. 142(3):1068–1091.Crossref, Google Scholar
• Shipman JE, Swanquist QT, Whited RL (2017) Propensity score matching in accounting research. Accounting Rev. 92(1):213–244.Crossref, Google Scholar
• Skinner DJ (2008) The rise of deferred tax assets in Japan: The role of deferred tax accounting in the Japanese banking crisis. J. Accounting Econom. 46(2–3):218–239.Crossref, Google Scholar
• Sloan RG (1996) Do stock prices fully reflect information in accruals and cash flows about future earnings? Accounting Rev. 71(3):289–315.Google Scholar
• Srivastava A (2023) Trivialization of the bottom line and losing relevance of losses. Rev. Accounting Stud. 28:1190–1208.Crossref, Google Scholar
• Wagner AF, Zeckhauser RJ, Ziegler A (2018) Company stock price reactions to the 2016 election shock: Trump, taxes, and trade. J. Financial Econom. 130(2):428–451.Crossref, Google Scholar