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Deloitte comment letter on Discussion Paper "Improving the Financial Reporting of Income Tax"

Published on: Jun 15, 2012

Deloitte's IFRS Global Office has submitted a letter of comment responding to the European Financial Reporting Advisory Group's (EFRAG's) and the UK Accounting Standards Board's (ASB's) Discussion Paper Improving the Financial Reporting of Income Tax.

The letter, which expresses the views of Deloitte's IFRS Global Office only, includes the following opinions:

  • We agree with the discussion paper's observation that a focus on user needs when re-assessing financial reporting of income taxes, such as the need for additional clarity on current and likely future tax payments, should be a central consideration.
  • We agree that clarity over an entity's tax position could be enchanced by improved disclosures and that further attention on uncertain tax positions is needed. The comment letter states, the "lack of guidance on this common issue [uncertain tax positions] currently represents a significant gap in IFRSs and we believe that the level of transparency over future cash tax payments could be enhanced by clarification of the measurement of and disclosures on uncertain tax positions."
  • We believe that the scope of "tax accounting'"should be considered further to address differences in accounting for taxes between jurisdictions.

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