IFRS Accounting for Income Taxes - IAS 12 (1 day)

Introduction

This course has been retired and is no longer available. Please see our latest courses on this topic below or contact our Customer Services Team.

Income taxes often represent 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 transactions and events reported in the financial statements. The amount of taxes currently payable or recoverable depends on tax law in an entity’s jurisdiction; having established the relevant amount, accounting for current tax is relatively simple. Greater complexity arises in recognising and measuring the longer-term deferred tax effects of transactions which represent temporary differences.

The training also addresses how accounting for taxes is affected by coronavirus in areas such as meeting the criteria for recognition of deferred tax assets.

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 and IFRIC 23 Uncertainty over Income Tax Treatments.

The course will update delegates on the limited amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction. These limit the scope of the initial recognition exemptions in IAS 12 and are effective for annual periods beginning on or after 1 January 2023. The course will also explain proposals to amend IAS 12 to reflect Pillar Two Model Rules.

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
• Recognise 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
• Identify and account for uncertain tax positions under IFRIC 23
• Comply with presentation and disclosure requirements

Who Should Attend

• Accountants in finance and reporting teams that prepare IFRS financial statements
• Corporate tax professionals
• External and internal auditors
• Financial and credit analysts who review financial statements

Topics

• General principles
  • Scope and objectives
  • Definitions – deferred tax, temporary differences, tax base
• Current tax
  • Current tax assets and liabilities; recognition and measurement
  • Recognition in profit or loss, other comprehensive income or equity
• Deferred tax
  • General principles
    • Tax bases of assets, liabilities and deferred revenue
    • Treatment of taxable and deductible temporary differences
    • Exceptions to the recognition rules
  • Recognition of deferred tax liabilities
  • Recognition of deferred tax assets
    • Sources of deductible temporary differences
    • Unused tax losses and tax credits and availability of future profits
    • Assessment of recoverability
  • Measurement
    • Enacted and substantively enacted tax rates
    • Reflecting different methods of recovery
  • Presentation and disclosure in the financial statements
  • Special applications
    • Tax credits
    • Leases
    • Provisions and employee benefits
    • Share-based payments
    • Revaluations
    • Investment properties
    • Intangible assets
    • Financial instruments
    • Investments in subsidiaries, associated and joint ventures
  • Treatment in consolidated financial statements
    • Business combinations
    • Purchased goodwill
    • Unrecognised tax losses
    • Intra-group transactions
  • Uncertainty over income tax treatments (IFRIC 23)
  • Issues arising on first-time adoption of IFRSs
  • Treatment in interim financial reports
  • Overview of differences between IFRS and US GAAP (ASC Topic 740)

Teaching Method

• Group live instruction
• Explanation of IFRS income tax accounting requirements using practical examples
• Application demonstrations using clear illustrations
• Presentation of deferred tax calculation models
• Use of real-world financial statements to illustrate complex issues
• Presentation and discussion of model financial statements, including disclosures
• Interactive participation is encouraged
• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Instructors

Venue

CPE/CPD Accreditation

IASeminars is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org .

 

Field of study: Accounting

Prerequisites

An understanding of the general principles and IFRS standards. No advance preparation is required for this course.