IAS 12

IAS 12: Income Taxes is part of the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). IAS 12 sets the accounting treatment of all taxable profits and losses, both national and foreign.[1]

History

Timeline of IAS 12:[2]

DateDevelopment
April 1978Exposure Draft E13 Accounting for Taxes on Income published
July 1979IAS 12 Accounting for Taxes on Income issued
January 1989Exposure Draft E33 Accounting for Taxes on Income published
January 1994IAS 12 (1979) was reformatted
October 1994Exposure Draft E49 Income Taxes published
October 1996IAS 12 Income Taxes issued
October 2000Limited Revisions to IAS 12 published (tax consequences of dividends)
March 2009Exposure Draft ED/2009/2 Income Tax published
September 2010Exposure Draft ED/2010/11 Deferred Tax: Recovery of Underlying Assets (Proposed amendments to IAS 12) published
December 2010Amended by Deferred Tax: Recovery of Underlying Assets
January 2016Amended by Recognition of Deferred Tax Assets for Unrealised Losses

Content

The taxable amount a company is liable for is composed of its tax base multiplied with the relevant tax rate in its country of settlement. The tax base for a company will in general be the final amount reported in the statement of profit or loss plus or minus any comprehensive income or loss. There are however situations where the accounting profit may differ from the taxable profit. This difference that arises most likely needs to be settled in a future period. Therefore the difference needs to be recognised on the balance sheet as a tax asset or liability. A tax asset is only recognisable to the extent that is likely to be recovered in the future, where a tax liability always needs to be recognised in full.[3]

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References
  1. "IAS 12 Technical Summary" (PDF). ifrs.org. IFRS Foundation. Retrieved 2016-10-26.
  2. "IAS 12 - Income Taxes". iasplus.com. Deloitte. Retrieved 2016-10-26.
  3. "International Accounting Standard 12 - Income Taxes" (PDF). Europa.eu. European Union. Retrieved 2016-10-26.
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