Christensen The researchers The sample The results for the first et al. (2008) examine whether exists of 444 hypothesis are that there is no firms choose the bath firms evidence on average that bigger level of the and 444 bath firms establish larger than valuation allowance against deferred control firms. necessary valuation allowances tax assets when in order to reverse those and they incur special increasing earnings in year +1. charges like The results for hypothesis H1B restructuring costs or write-offs. are that the magnitude of a valuation allowance provides information about how it will perform in the future. Burgstahler In this study Earnings For the study Burgstahler and Dichev (1997) & Dichev distribution researchers Burgstahler found that firms use earnings and statically examine whether and Dichev management to avoid earnings there is that firms test. used all decreases and losses. do earnings management to available avoid earnings observations decreases and of the annual losses. industrial and research Compustat databases for the year 1976-1994 which meet minimal data requirements.
Christensen et al. (2008) The researchers examine whether firms choose the level of the valuation allowance against deferred tax assets when they incur special charges like restructuring costs or write-offs. The sample exists of 444 bath firms and 444 control firms. The results for the first hypothesis are that there is no evidence on average that bigger bath firms establish larger than necessary valuation allowances in order to reverse those and increasing earnings in year +1. The results for hypothesis H1B are that the magnitude of a valuation allowance provides information about how it will perform in the future. Burgstahler & Dichev In this study researchers examine whether there is that firms do earnings management to avoid earnings decreases and losses. For the study Burgstahler and Dichev used all available observations of the annual industrial and research Compustat databases for the year 1976-1994 which meet minimal data requirements. Earnings distribution and statically test. Burgstahler and Dichev (1997) found that firms use earnings management to avoid earnings decreases and losses.