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

Course Details

Code:1265
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Introduction

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

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
  • Uncertain tax positions
  • Issues arising on first-time adoption
  • 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

The instructor for this course will be drawn from one of our core faculty of subject matter experts. Further details will be published at the earliest opportunity.

Venue

Our seminars take place in 4 star professional conference facilities, generally in city-centre hotels like the Marriott, Sheraton or Hilton brands. Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available. Coffee and lunch will be provided.

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. Participants who have less familiarity with IFRS may want to combine this course with a refresher or a review of the core IFRS standards; for example, by attending Course 1011: IFRS Fundamentals - Comprehensive Workshop. No advance preparation is required for this course.