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Recognition of Deferred Tax Assets for Unrealized Losses (Proposed Amendments to IAS 12) [Completed]

Effective date:

The amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted.

The AcSB expects to include the amendments in Part I of the CPA Canada Hand­book in Q2 2016.

Transitional provisions:

As transition relief, an entity may recognize the change in opening retained earnings of the earliest comparative period on initial application. The IASB has not added additional transition relief for first-time adopters.

Last updated:

January 2016

Overview

IAS 12 addresses the accounting for income taxes, including deferred tax assets.  The amendments give guidance that clarify how to account for deferred tax assets related to debt instruments measured at fair value.  The amendments were issued in response to diversity in practice and are relevant in circumstances in which the entity reports tax losses.

Other developments

January 2016

On January 19, 2016, the IASB published final amendments to IAS 12, Income Taxes. The IASB had concluded that the diversity in practice around the recognition of a deferred tax asset that is related to a debt instrument measured at fair value is mainly attributable to uncertainty about the application of some of the principles in IAS 12. Therefore the amendments consist of some clarifying paragraphs and an illustrating example. The amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted. As transition relief, an entity may recognize the change in opening retained earnings of the earliest comparative period on initial application. The Board has not added additional transition relief for first-time adopters.

November 2015

On November 23, 2015, the IASB updated its Work Plan in respect of this project to note that it is currently drafting the final amendments to the IFRS, which it expects to issue by February 29, 2016.

March 2015

In March 2015, the IFRIC was presented with a summary and an analysis of the 68 comment letters received on the ED. The IFRIC decided to propose that the IASB should proceed with the amendments, subject to some amendments to the wording proposed in the ED.

October 2014

On October 3, 2014, the AcSB issued an ED that corresponds to the IASB’s ED.

August 2014

On August 20, 2014, the IASB published for public comment an ED which proposes limited amendments to IAS 12, Income Taxes.

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