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Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12) [Completed]

Effective date:

The amendments are effective for annual reporting periods beginning on or after January 1, 2023. Early adoption is permitted.

An entity applies the amendments to transactions that occur on or after the beginning of the earliest comparative period presented. It also, at the beginning of the earliest comparative period presented, recognizes deferred tax for all temporary differences related to leases and decommissioning obligations and recognizes the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at that date.

Last up­dated:

May 2021

Overview

At its meeting on October 24, 2018, the International Accounting Standards Board discussed the IFRS Interpretations Committee’s recommendation to propose a narrow-scope amendment to IAS 12, Income Taxes. The proposed amendment related to the recognition of deferred tax when an entity accounts for transactions, such as leases or decommissioning obligations, by recognizing both an asset and a liability.

On July 17, 2019, the IASB published an Exposure Draft "Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Proposed amendments to IAS 12)" that aim at clarifying how companies account for deferred tax on leases and decommissioning obligations. Comments were requested by November 14, 2019.

In May 2021 the Board issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The amendments were issued in response to a recommendation from the IFRS Interpretations Committee. Research conducted by the Committee indicated that views differed on whether the recognition exemption applied to transactions, such as leases, that lead to the recognition of an asset and liability. These differing views resulted in entities accounting for deferred tax on such transactions in different ways, reducing comparability between their financial statements. The Board expects that the amendments will reduce diversity in the reporting and align the accounting for deferred tax on such transactions with the general principle in IAS 12 of recognizing deferred tax for temporary differences.

 

Other de­vel­op­ments

May 2021

On May 7, 2021, the IASB published Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) that clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations.

March 2021

On March 26, 2021, IASB staff updated the Work Plan to indicate that the Board plans to issue the amendments to IAS 12 in May 2021.

October 2020

On October 30, 2020, IASB staff updated the Work Plan to indicate that the Board plans to issue the amendments to IAS 12 shortly (no date specified).

September 2020

On September 28, 2020, IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in October 2020.

July 2020

On July 23, 2020, IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in Q4/2020.

April 2020

On April 23, 2020, the IASB staff updated the work plan to indicate that the Board will decide the project direction (no date specified).

On April 17, 2020, IASB staff updated the Work Plan to indicate that the Board plans to review the Exposure Draft feedback in June 2020.

January 2020

On January 31, 2020, the IASB staff updated the Work Plan to indicate that the IASB expects to review the Exposure Draft feedback in Q2/2020.

November 2019

On November 25, 2019, the IASB staff updated the Work Plan to indicate that the Board plans to review the Exposure Draft feedback in Q1/2020.

July 2019

On July 29, 2019, the IASB® staff updated the work plan to indicate that the Board will review the feedback on the Exposure Draft (no date specified).

On July 29, 2019, the AcSB issued its exposure draft that corresponds to the IASB’s Exposure Draft on this topic. Comments are requested by November 14, 2019.

On July 17, 2019, the IASB published an exposure draft "Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Proposed amendments to IAS 12)" that aim at clarifying how companies account for deferred tax on leases and decommissioning obligations. Comments are requested by November 14, 2019.

April 2019

On April 12, 2019, the IASB® staff updated the work plan to indicate that the Board expects to issue an Exposure Draft in June 2019.

January 2019

On January 25, 2019, the IASB staff updated the work plan to indicate that the Board expects to issue an Exposure Draft in Q2/2019.

December 2018

On December 14, 2018, the IASB staff has added a new project to the work plan in respect of amendments to IFRS 17, in­di­cating that the Board ex­pects to is­sue an Ex­po­sure Draft in the first half of 2019.

November 2018

In No­vem­ber 2018, the IASB staff up­dated the work plan to in­di­cate that the IASB ex­pects to is­sue an Ex­po­sure Draft in re­spect of the nar­row-scope amend­ment to IAS 12 in the first half of 2019.

 

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