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ESMA issues statement on the application of IAS 12

  • ESMA (European Securities and Markets Authority) (dark gray) Image

15 Jul 2019

The European Securities and Markets Authority (ESMA) has issued a public statement to help promote consistent application of IAS 12, ‘Income Taxes’.

The statement provides issuers, auditors and audit committees with information related to two areas that European enforcers often challenge. These areas are:

  • “The probability that future taxable profits will be available against which unused tax losses and unused tax credits can be utilised (paragraph 34 of IAS 12), assessed through the criteria provided by paragraph 36 of IAS 12;”
  • “The ‘convincing other evidence’ that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilised by the issuer (paragraph 35 of IAS 12), in cases where the issuer has a history of recent losses.”

For more information, see the press release on the ESMA website.

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