IAS 12: Income Taxes is part of the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). IAS 12 sets the accounting treatment of all taxable profits and losses, both national and foreign.
History
Timeline of IAS 12:
| Date | Development |
|---|---|
| April 1978 | Exposure Draft E13 Accounting for Taxes on Income published |
| July 1979 | IAS 12 Accounting for Taxes on Income issued |
| January 1989 | Exposure Draft E33 Accounting for Taxes on Income published |
| January 1994 | IAS 12 (1979) was reformatted |
| October 1994 | Exposure Draft E49 Income Taxes published |
| October 1996 | IAS 12 Income Taxes issued |
| October 2000 | Limited Revisions to IAS 12 published (tax consequences of dividends) |
| March 2009 | Exposure Draft ED/2009/2 Income Tax published |
| September 2010 | Exposure Draft ED/2010/11 Deferred Tax: Recovery of Underlying Assets (Proposed amendments to IAS 12) published |
| December 2010 | Amended by Deferred Tax: Recovery of Underlying Assets |
| January 2016 | Amended by Recognition of Deferred Tax Assets for Unrealised Losses |
Content
The taxable amount a company is liable for is composed of its tax base multiplied with the relevant tax rate in its country of settlement. The tax base for a company will in general be the final amount reported in the statement of profit or loss plus or minus any comprehensive income or loss. There are however situations where the accounting profit may differ from the taxable profit. This difference that arises most likely needs to be settled in a future period. Therefore the difference needs to be recognised on the balance sheet as a tax asset or liability. A tax asset is only recognisable to the extent that is likely to be recovered in the future, where a tax liability always needs to be recognised in full.
References
- "IAS 12 Technical Summary" (PDF). ifrs.org. IFRS Foundation. Retrieved 2016-10-26.
- "IAS 12 - Income Taxes". iasplus.com. Deloitte. Retrieved 2016-10-26.
- "International Accounting Standard 12 - Income Taxes" (PDF). Europa.eu. European Union. Retrieved 2016-10-26.