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.

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