Central European Business Review 2025, 14(2):75-92 | DOI: 10.18267/j.cebr.385

Predictive Ability of Accounting Standard IAS 12 in Agriculture

Goranka Knezević ORCID...1, Vladimir Ristanović ORCID...2, Vladan Pavlović ORCID...3
1 Singidunum University, Faculty of Business, Department of Accounting, Danijelova 32, Belgrade, Serbia. Email: gknezevic@singidunum.ac.rs (corresponding author)
2 Institute of European Studies, Trg Nikole Pašića 11, Belgrade, Serbia. Email: vladimir.ristanovic@ies.rs
3 University of Pristina in Kosovska Mitrovica, Faculty of Economics, Kolašinska 158, Kosovska Mitrovica, Serbia. Email: vladan.pavlovic@pr.ac.rs

The predictive value of tax allocations (deferred taxes) and their incremental power in explaining future cash taxes paid and current tax expenses in the agricultural industry is a topic of significant relevance. This is particularly important for policymakers and managers due to the complexity of accounting standards in this area. The goal of the paper is to enhance the understanding of tax planning techniques used by agricultural companies. We consider four variables crucial in our analysis: dependent (cash taxes paid and current tax expenses) and independent variables (deferred tax assets and deferred tax liabilities). Our modelling of the relationship reveals that current tax expenses have a predictive power to explain variations in the cash outflow for income taxes, making it a relevant factor. Deferred tax assets explain the cash tax outflow, while regression demonstrates the power and relevance of deferred tax liabilities in predicting variations of current income tax expenses in agricultural companies.
Implications for Central European audience: In Central Europe, the business environment and influence of the agricultural sector are similar to those in Serbia. Companies apply the same accounting standard for the recognition and evaluation of deferred taxes according to the IAS 12 standard. The results of this paper could be used by managers in all companies in this industry to apply adequate tax planning techniques to satisfy their tax goals and to minimize tax litigation risk.

Keywords: cash paid for taxes; deferred tax assets; deferred tax liabilities; tax planning; tax expense
JEL classification: M41, M48

Received: April 12, 2024; Revised: July 28, 2024; Accepted: September 6, 2024; Prepublished online: April 13, 2025; Published: May 30, 2025  Show citation

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Knezević, G., Ristanović, V., & Pavlović, V. (2025). Predictive Ability of Accounting Standard IAS 12 in Agriculture. Central European Business Review, 14(2), 75-92. doi: 10.18267/j.cebr.385
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