The Board was reminded of the decisions taken at the February meeting with regards to the Income Tax project. At that meeting, the Board agreed to limit the scope of the project to two practice issues, being deferred tax on property remeasurement at fair value and uncertain tax positions, as well as five proposals from the exposure draft that were very popular with respondents.
Deferred tax on remeasurement of property at fair value
The staff presented the Board with two alternatives to achieve the required outcome with regards to investment property measured at fair value in accordance with IAS 40:
- An exception to the measurement principles based on the expected manner of recovery under IAS 12 paragraph 52 or
- Extending the guidance in paragraph 52 on the expected manner of recovery.
The Board considered whether to limit any amendment to IAS 12 to investment property measured at fair value, or to extent it to other non-depreciable assets measured at fair value. With a majority vote, it was agreed not to limit the amendment to investment property only, but to broaden it to other non-depreciable assets.
On the matter of an exception vs. an extension of the guidance, the Board decided through majority vote to amend IAS 12 by including an exception to the principles in paragraph 52.
Uncertain tax positions
The Board was presented with a proposed timeline in which to address the remaining proposals. In accordance with the proposed timeline, uncertain tax positions would have been discussed by the Board in October. Initially it was decided to only address uncertain tax positions once the amendments to IAS 37 have been finalised.
After a short deliberation, the Board agreed to dealing with uncertain tax positions separate from the other issues, in order to provide speedy relief to constituents. The Board instructed the staff to prepare an exposure draft for ballot. The exposure draft will be open for comment for a period of 60 days.
The remaining five issues on IAS 12 will be dealt with at the next Board meeting with an exposure draft expected by December 2010.