FRSB expressed some disappointment that the IASB's recent amendment to IAS 12 Income Taxes, as although it provides relief for entities that measure investment property using the revaluation model in accordance with IAS 40 Investment Property, the amendment does not incorporate all the amendments as initially proposed and supported by the FRSB.

New Zealand does not have a capital gains tax and has recently changed its tax treatment of buildings, resulting in many entities recognising substantial deferred tax liabilities. Many in New Zealand hold the view the application of IAS 12 in these circumstances produces outcomes that do not best reflect an entity's tax position.

In its 3 December 2010 meeting, the IASB noted the concerns of New Zealand and expressed a willingness to work towards a solution if it can be quickly and easily implemented. If such a solution can be formulated, the IASB may consider and expose a limited amendment to IAS 12. If such a solution cannot be found, then the matter would be considered when the Board conducts a comprehensive review of IAS 12 in future. The FRSB has agreed to establish a subcommittee to consider the matter further with a view to liaising with the IASB in the near future.

Similar deferred tax issues also arise in Hong Kong and other jurisdictions. Hong Kong for instance has amended its local implementation of the IFRS for SMEs to change the way deferred taxes are calculated to address some of these issues.

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