EFRAG draft comment letter on the Interpretations Committee's tentative agenda decision on IAS 12
Sep 27, 2011
The European Financial Reporting Advisory Group (EFRAG) has issued its draft comment letter on the Interpretations Committee's tentative rejection decision on IAS 12 Income Taxes.
In December 2010, the IASB issued amendments to IAS 12 introducing a rebuttable presumption that an asset is recovered entirely through sale unless the entity has clear evidence that recovery will occur in another manner. In September 2011, the Interpretations Committee received a request to clarify whether the list of cases in which that presumption can be rebutted is exhaustive.
The Interpretations Committee decided not to add this item to its agenda arguing that IAS 12 is sufficiently clear and that diversity in practice on the rebuttal of the presumption should not emerge. However, the rejection notice also contains guidance on the subsequent accounting if the presumption is rebutted.
EFRAG therefore believes that the rejection notice is in effect an interpretation. In EFRAG's view, rejection notices should not be written as though they were authoritative guidance and should not result in a change in accounting practice.
Please click for EFRAG's press release containing a link to the draft comment letter (link to EFRAG website).