Please use this identifier to cite or link to this item:
http://hdl.handle.net/10071/26048
Author(s): | Silva, J. Souto, N. Pereira, J. |
Editor: | Sandeep Kautish |
Date: | 2021 |
Title: | Simple valuation of compounded deferred tax assets using a binomial algorithm |
Book title/volume: | Using strategy analytics to measure corporate performance and business value creation |
Reference: | Silva, J., Souto, N., & Pereira, J. (2021). Simple valuation of compounded deferred tax assets using a binomial algorithm. Em Sandeep Kautish (Eds.). Using strategy analytics to measure corporate performance and business value creation (pp. 1-16). IGI Global. 10.4018/978-1-7998-7716-5.ch009 |
ISBN: | 9781799877165 |
DOI (Digital Object Identifier): | 10.4018/978-1-7998-7716-5.ch009 |
Keywords: | Avaliação -- Evaluation Deferred tax asset Contabilidade -- Accounting Análise de balanços -- Balance sheet analysis Binomial |
Abstract: | Deferred tax asset (DTA) is a tax/accounting concept that refers to an asset that may be used to reduce future tax liabilities of the holder. In a company's balance, it usually refers to situations where it has either overpaid taxes, paid taxes in advance, or has carry-over of losses (the latter being the most common situation). In fact, accounting and tax losses may be used to shield future profits from taxation, through tax loss carry-forwards. The purpose of this chapter is to propose a precise and conceptually sound approach to value DTAs. For that purpose, making use of an adapted binomial CRR (Cox, Ross, and Rubinstein) algorithm, the authors derive a precise way to value DTAs. This way, the DTAs are valued in a similar way of the binomial options pricing model, and the subjectivity of its evaluation is greatly reduced. The authors show that with the proposed evaluation techniques, the DTA's expected value will be much lower than the values normally used in today's practice, and the bank's financial analysis will lead to much more sound and realistic results. |
Peerreviewed: | yes |
Access type: | Open Access |
Appears in Collections: | ISTAR-CLI - Capítulos de livros internacionais |
Files in This Item:
File | Size | Format | |
---|---|---|---|
bookPart_85663.pdf | 560,07 kB | Adobe PDF | View/Open |
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.