EFRAG final comment letter on the proposed amendments regarding the recognition of deferred tax assets for unrealised losses

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

09 Jan, 2015

The European Financial Reporting Advisory Group (EFRAG) has published a final comment letter on the amendments to IAS 12 'Income Taxes' that the IASB proposed in response to diversity in practice and that are relevant in circumstances in which the entity reports tax losses.

As the IASB concluded that 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, the proposed amendments (in Exposure Draft (ED) 2014/3) consist of some clarifying paragraphs and an illustrating example.

EFRAG is supportive of the core proposals contained within the ED.  However it has “some concerns and wording suggestions” which it suggests the IASB takes into account when finalising the amendments “to ensure that the welcomed clarifications are fully effective”. 

The full comment letter is available on the EFRAG website.

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