Income taxes are often significant numbers in financial statements, which impact on an entity’s reported financial position and performance. The objective of accounting for income taxes is to reflect the current and future tax effects of all transactions already reported in the financial statements. The amount of taxes currently payable or recoverable varies depending on tax law in an entity’s jurisdiction; having established the relevant amount, accounting for current tax is relatively simple. Greater complexity arises in recognizing and measuring the longer-term deferred tax effects of transactions which represent temporary differences.

IAS 12 Income Taxes is the principal source of guidance on accounting for income taxes in IFRS. It is supplemented by SIC-25 Income Taxes – Changes in the Tax Status of an Entity or its Shareholders. Income taxes was an agenda project in the Memorandum of Understanding between the IASB and the Financial Accounting Standards Board but progress was halted in 2010 to allow resources to be diverted to more urgent topics: the Board has included the topic as a research project in its current Work Plan.

This course provides comprehensive coverage of IAS 12 governing the recognition, measurement, presentation and disclosure of income taxes. The program is designed to guide delegates through the complex technical issues associated with accounting for income taxes and also includes an overview of differences between current IFRS and US GAAP requirements.

The course answers questions such as:

  • What are the principles underlying accounting for income taxes and how are they applied?
  • What are the issues and exceptions involved in accounting for income taxes?
  • How are deferred tax liabilities and assets recognized, measured and presented in IFRS financial statements?
  • What disclosures are required?
  • How should uncertain tax positions be reflected?
  • How should specific transactions, such as share-based payments, be accounted for?

Learning Objectives

  • Apply the principles of IAS 12
  • Recognize and measure deferred tax assets and liabilities
  • Understand the practicalities involved in accounting for income taxes
  • Learn the methods that may be applied in accounting for complex tax situations
  • Know how to identify and account for uncertain tax positions
  • Comply with IFRS presentation and disclosure requirements

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Skill Level: Beginner