These various publications address International Financial Reporting Standards (IFRSs) and are designed to keep you apprised of new and topical issues that may be relevant to your enterprise’s IFRS transition process.
We have pleasure in enclosing Deferred tax – A Chief Financial Officer’s guide to avoiding the pitfalls, an application guide by the IFRS team at Grant Thornton International Ltd.
International Financial Reporting Standards (IFRS) IAS 12, Income Taxes (IAS 12) is not new. However, for many finance executives, the concepts underlying the computation of deferred tax are not intuitive. IAS 12 takes a mechanistic approach to the computation but also requires significant judgement in some areas. Also, applying the concepts of IAS 12 requires a thorough knowledge of the relevant tax laws. For all these reasons, many Chief Financial Officers (CFOs) find the calculation of a deferred tax provision causes significant practical difficulties.
The guide is intended for CFOs of businesses that prepare financial statements under IFRS. It illustrates
IAS 12’s approach to the calculation of deferred tax but is not intended to explain every aspect of the standard in detail.
Rather, it summarizes the approach to calculating the deferred tax provision in order to help CFOs prioritize and identify key issues. To assist CFOs with these application issues, the guide also includes interpretational guidance in certain problematic areas of the deferred tax calculation.
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