Which of the following is not a finding of previous empirical research on income tax allocation?
a. Income using income tax allocation had a higher degree of association with security price behavior than income determined without income tax allocation.
b. The net-of-tax method using a tax rate significantly higher than existing rates had a higher association with security prices than income tax allocation using existing rates.
c. There was a better association of net deferred tax liabilities to firm value under SFAS No. 109 than under its predecessor when tax rates increased under the Revenue Reconciliation Act of 1993.
d. Investors do not view deferred tax liabilities as real liabilities.
ANSWER: D
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