Apr 2010, Issue 2 Income tax accounting under IFRS - what is the status of the IASB's income tax project? Pursuant to the objectives of clarifying and improving IAS 12 Income Taxes and reducing the differences between IAS 12 and the US Standard ASC 740 Incomes Taxes (formerly FAS 109), in March 2009 the IASB published an Exposure Draft (ED) to replace the existing standard.
The proposals included in the ED more closely align IFRS and US GAAP and attempted to address some of the practical issues with the existing standard. Although the ED did not change the basic principles of tax accounting (i.e. balance sheet liability model), it proposed some significant changes to IAS 12. The comment period on the ED ended on 31 July 2009. Respondents generally supported the above mentioned objectives of the project. However, most respondents considered that the ED failed to achieve the stated objectives and viewed many of the proposed changes in the ED not as improvements, but as an introduction of more complex rules. Overall, there was limited support for finalising the ED in its current form.
In this issue we highlight recent developments and the current status of the IASB's clarification and alignment of IAS 12.
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