The proposed standard (set out in ED/2009/2 Income Tax
) retains the basic IAS 12
approach to accounting for income tax, known as the temporary difference approach. The objective of that approach is to recognise now the future tax consequences of past events and transactions, rather than waiting until the tax is payable or recoverable. Although the proposed standard retains the same principle, the IASB proposes to remove most of the exceptions in IAS 12, to simplify the accounting and strengthen the principle in the standard. In addition, the IASB proposes a changed structure for the standard that will make it easier to use.
Comments on the exposure draft are due by 31 July 2009. The proposal also more closely aligns international standards with FASB Statement 109 Accounting for Income Taxes
. Click for IASB Press Release on Income Tax