DEFERRED TAXATION AND FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract

This study examined the effect of deferred taxation on the financial performance of listed industrial goods firms in Nigeria. Data were collected from the audited annual reports of nine listed companies for the period 2015–2024 and analyzed using random-effects panel regression. The findings reveal that deferred tax assets have a negative but statistically insignificant impact on both return on assets (ROA) and return on equity (ROE), indicating that their accumulation does not significantly influence firm profitability. In contrast, deferred tax liabilities have a positive and significant effect on ROA, while their impact on ROE is positive but not statistically significant. Based on these results, the study recommends that firms strategically manage deferred tax liabilities, regulators provide clear reporting guidance, and investors consider deferred tax liabilities as an indicator of asset profitability. Future research should explore other factors interacting with deferred tax components to better understand their influence on firm performance.