The Effect of Deferred Tax Assets and Liabilities on Firm Value: A Case Study

Developing and globalizing money and capital markets necessitated the design of a common financial reporting standards in order to optimize the quality of financial information needed by investors. In this context, the International Accounting Standards Institution was established and international accounting and reporting standards were prepared. One of the most important of these standards is the "Income Tax Standard No. 12". Accounting and tax values of assets and liabilities related to taxation of corporate income may differ due to deductible temporary differences. These differences are reported as deferred tax assets and liabilities. These assets and liabilities, on the other hand, affect the net profit and cash flows of the period due to their tax income and expense effects. The concept of firm value expresses the net present value of the cash flows created by the firm in a certain projection period. The aim of this study is to determine the\reffects of deferred tax elements on firm value on the basis of a sample firm whose financial statements are prepared under certain assumptions. According to the results, deferred tax assets, which\rare assumed to be realized in each period by 1% of the profit before tax in the forecast period, increase respectively the value of activities, company and equity by 1.25%, 1.24% and 1.27%, Deferred tax liabilities, which are assumed to be realized as 1% of profit before tax, reduce respectively the value of activities, firm and equity by 0.84%, %0.83 and 0.85%