The determinants of the deferred tax allowance account under SFAS No. 109

A study examines the association between the recognized deferred tax asset valuation allowance and certain variables put forth as sources of evidence in the FASB's (1992) Statement of Financial Accounting Standards No. 109. The paper provides an important initial step in learning how companies apply SFAS 109 guidelines. Evidence is found that certain variables consistent with SFAS 109 examples are highly associated with cross-sectional differences in the percent of deferred tax assets that are taken as an allowance.