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COVID-19–Understanding the impact on deferred taxes in 2020

The Grant Thornton International IFRS team has published Understanding the impact of COVID-19 on your 2020 deferred tax provision.

The COVID-19 pandemic is having a tremendous impact on the world’s economy. Many businesses are struggling to stay afloat and doing whatever they can right now to rationalize costs and preserve any cash surpluses they have in order to bridge future cash flow needs. Around the world, governments are stepping in to try and limit the impact of the pandemic by providing financial support in numerous ways, from direct cash payments through to the deferral of tax payments.

This publication sets out four key areas of an entity’s tax provision that could be affected by the impacts of COVID-19. More specifically, it focuses on how government support in the form of tax incentives and tax relief might change previous assessments that were made applying IAS 12, Income Taxes. A key point to be mindful of is that any one of these key areas may be applicable if interim financial statements under IAS 34, Interim Financial Reporting, are being prepared.

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