Short-Term Convergence — Income Taxes
Date recorded:
Foreign Subsidiary Exceptions
The issue discussed was whether the foreign unremitted earnings exceptions in SFAS 109 and IAS 12 should be retained. Taxation experts gave a presentation to both Boards on the functioning of the US Foreign Tax Credit. After some discussion, citing the complexity of this issue, the Boards agreed to follow the staff recommendation to retain the current exceptions in the standards. In addition, to achieve convergence, the Boards agreed to amend the language in IAS 12 so that it is similar to that in SFAS 109 and US APB Opinion 23 on unremitted foreign earnings.
Staff were also asked to bring to the Boards a paper setting out disclosure suggestions that would enhance the current requirements.
