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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We have pleasure in enclosing Financial Instruments on Display – Illustrative Disclosures and Guidance on IFRS 7, an application guide by the IFRS team at Grant Thornton International Ltd (Grant Thornton International).

International Financial Reporting Standard IFRS 7, Financial Instruments: Disclosures (IFRS 7), is not new – it came into effect for annual periods beginning on or after January 1, 2007. Nonetheless we think this guide can be very useful.

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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.

The Road to Conversion

In March 2007, the International Accounting Standards Board issued a revised version of the International
Financial Reporting Standard IAS 23, Borrowing Costs. This revised version becomes mandatory for annual periods beginning on or after January 1, 2009.

The former version of IAS 23 allowed entities to choose between capitalizing borrowing costs directly
attributable to the acquisition, construction or production of qualifying assets as part of the cost of these assets, or expensing these costs. The revised version of IAS 23 eliminated this choice by requiring the capitalization of all borrowing costs directly attributable to the acquisition, construction or production of qualifying assets as part of the cost of these assets.

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