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Income taxes — Comprehensive project


This project originally formed part of the overall IASB-FASB convergence project, which seeks to eliminate a variety of differences between IFRSs and US GAAP.

IAS 12 Income Taxes and ASC 740 (SFAS 109) share a common approach, the temporary difference approach.  The objective of the temporary difference approach is to recognise the tax that would be payable or receivable if the entity’s assets and liabilities were recovered or settled at their present carrying amount.

However, the standards include different exceptions to the temporary difference approach. There are also differences between the standards relating to the recognition and measurement of deferred tax assets and liabilities and the allocation of tax to the components of comprehensive income and equity.

This project originally sought to eliminate the differences between IFRS and US GAAP, as well as to clarify various aspects of IAS 12. 

Current status of the project

The IASB issued ED/2009/2 Income Tax in March 2009. On the basis of the joint IASB-FASB discussion in October 2009, the IASB decided not finalise the ED, but instead undertake some limited scope amendments to IAS 12.

The IASB has identified income taxes as a possible longer term research project in its Feedback Statement resulting from its agenda consultation 2011.  Preliminary work on the research project is not expected to commence until after the 2015 agenda consultation.

Project milestones

September 2002 Added to the active agenda
31 March 2009 Exposure Draft ED/2009/2 Income Tax published Comment deadline 31 July 2009
October 2009 The IASB and FASB decided not to finalise the proposals in the ED, instead opting for limited-scope amendments to IAS 12.

Related Discussions

  • Income taxes – Recovery of underlying assets

  • Dec 03, 2010

  • The staff presented the IASB with a summary of the responses received on the Exposure Draft 'Deferred Tax: Recovery of Underlying Assets' published in September 2010. The board considered (1) the scope of the exception and (2) agreed on an effective date of 1 January 2012.

  • Income Taxes

  • Aug 26, 2010

  • EFRAG and European standard-setters questioned whether the proposed quick-fix for property companies would be worth the effort.

  • Income taxes – Recovery of underlying assets

  • Aug 24, 2010

  • In preparation of the issuance of the exposure draft 'Deferred Taxes: Recovery of Underlying Assets', the staff shared a pre-ballot draft with certain constituents to obtain feedback. This process identified five primary issues the staff brought back to the IASB for reconsideration.

  • Insurance contracts

  • Jun 23, 2010

  • The IASB and FASB discussed: (1) cash flows that arise as an insurer fulfils its existing insurance contract (2) acquisition costs (3) unbundling (4) presentation (5) interest accretion residual/composite margins (6)

  • Income taxes

  • Jun 20, 2010

  • The IASB considered 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.

  • Income Tax

  • Nov 17, 2009

  • The Board discussed the possible ways forward following the largely negative feedback from constituents on the Income Tax ED and following the discussion at the Joint Meeting with the FASB in October. The Board discussed possibilities of a more limited project that would target the most urgent issues.

  • Income Taxes

  • Oct 28, 2009

  • The Board discussed comment letters received on the Income Tax exposure draft.

  • Income Taxes

  • Jan 23, 2009

  • The Board discussed different aspects of discounting current tax, including discount rate and IAS 20 implications.

  • Income Taxes

  • Jul 22, 2008

  • The Boards discussed various 'sweep issues' arising from their review of a pre-ballot draft of an Exposure Draft (ED) that would replace IAS 12 Income Taxes.

  • Income Taxes

  • Jul 19, 2007

  • The Board held a brief discussion of three issues noted for resolution before the joint FASB/IASB exposure draft on income taxes is issued.

  • IAS 12 — Deferred tax arising from unremitted overseas earnings

  • May 04, 2007

  • The IFRIC discussed whether it should provide guidance about how an entity should account for potential deferred tax liabilities arising from temporary differences created by income that is earned in a foreign jurisdiction but is not taxable until it is remitted to the entity's home jurisdiction.

  • Short-term Convergence — Income Taxes

  • Apr 17, 2007

  • The Boards discussed whether to remove the temporary difference approach in IAS 12 Income Taxes prohibiting the recognition of deferred tax liabilities on the initial recognition of goodwill. The Boards also discussed the treatment of acquired assets and assumed liabilities that have a tax base different from their initial carrying amount, both in a business combination and outside a business combination.

  • Income Taxes

  • Jan 24, 2007

  • The Board discussed the accounting for investment allowances in the context of a specific tax regime's requirements.

  • Short-term Convergence: Income Taxes

  • Feb 21, 2006

  • The Boards discussed a staff proposal that the exception from recognising deferred taxes on undistributed earnings of foreign subsidiaries and joint ventures currently proposed in the draft ED be changed to an exception for subsidiaries and joint ventures in jurisdictions in which intragroup distributions have taxable consequences.

  • Income Taxes - Short-term Convergence

  • Dec 14, 2005

  • The Boards discusssed the treatment of assets and liabilities that have a tax base that differs from their initial carrying amount and the recognition of deferred tax assets and liabilities arising on the initial recognition of goodwill

  • Short-term Convergence — Income Taxes

  • Apr 19, 2005

  • The staff gave an introductory briefing on the issues of intraperiod tax allocation being the allocation of the total tax expense or benefit for the period to various components of comprehensive income (for example, continuing operations and discontinued operations, other comprehensive income[OCI]) and capital items).

  • Short-term Convergence — Income Taxes

  • Feb 17, 2005

  • The Board discussed the implementation and operation of substantively enacted tax rates. The Board also received an update from the FASB staff on current deliberations on the initial recognition, initial and subsequent measurement, derecognition, classification and disclosures of uncertain tax position.

All Related