The Managerial Centrality and Discretionary Recognition of Deferred Tax Assets

[Purpose]This study aims to empirically examine the impact of the managerial centrality on CEO within firms on the increasing discretionary recognition of deferred tax assets post the adoption of K－IFRS in 2011, which relaxed the criteria for the realizability of deferred tax assets. [Methodology]This study utilized a sample of 626 firm－years from 2015 to 2018 to examine the relevance between the level of the managerial centrality on CEO within firms and the discretionary recognition of the realizability of deferred tax assets. This relevance was tested through multiple regression analysis. [Findings]The results of the analysis indicated a positive relevance between the level of the managerial centrality on CEO within firms and the discretionary recognition of deferred tax assets at the 5% significance level. This suggests that the higher the level of the managerial centrality on CEO within a firm, the higher the level of discretionary recognition of deferred tax assets. [Implications]This study is expected to contribute to the literature by empirically verifying the impact of the managerial centrality on CEO within firms on the trend of increased discretionary recognition of deferred tax assets, a trend that has been observed following the relaxation of criteria for the realizability of deferred tax assets with the adoption of K－IFRS.