To properly account for the tax effects of all transactions occurring within a period, a deferred tax provision is necessary to comply with matching concept. The study examined the effect of deferred tax accounting mechanism on financial performance of listed industrial goods manufacturing firms in Nigeria. The population of the study is 21 listed Industrial goods manufacturing firms in Nigeria; Purposive sampling techniques was adopted to select ten (10) firms with relevant complete data. Ex-post facto research design was used in obtaining data from Annual financial statements of the selected sample for the period 2015 to 2024.   Simple regression model was used to analyse data. The findings revealed that   deferred Tax Liabilities is statistically insignificant on Earning per Share and Return on Asset (t = 0.0797, p = 0.9366) (t = -1.494, p = 0.1384). While deferred Tax Liabilities have a significant negative effect on Return on Equity (t = -2.270, p = 0.0254), this suggests that higher value of deferred tax obligation will significantly reduce equity performance. The study recommends that firms should adopt proactive deferred tax planning strategies to prevent excessive accumulation of deferred tax liabilities which may erode shareholders’ returns; improve the clarity and depth of deferred tax disclosures in financial statements to ensures shareholders and analysts have  better understanding of  earnings and the potential equity implications and management should incorporate deferred tax liabilities into broader capital structure and performance evaluation frameworks.

Keywords: Deferred Tax Liability, Financial Performance, Earning Per Share, Return on Asset Return on Equity.