On October 21, 2015 the IFRS Interpretations Committee published for public comment two proposed Interpretations of Standards, designed to address diversity in how the Standards are applied in practice. One gives guidance on how uncertainty over income tax treatments should affect the accounting for income taxes. The other one addresses which exchange rate should be used to report foreign currency transactions when payment is made or received in advance.
The proposed interpretation on how uncertainty over income tax treatments should affect the accounting for income taxes can be found in the document: “Draft IFRIC Interpretation DI/2015/1 - Uncertainty over Income Tax Treatments”, which was published for comments on October 21, 2015. Comments on the document have to be received by January 19, 2016.
In the introduction of the document the following is stated:
“The International Accounting Standards Board’s IFRS Interpretations Committee (‘the Interpretations Committee’) has published the draft Interpretation Uncertainty over Income Tax Treatments (‘the draft Interpretation’).
The Interpretations Committee was asked when the recognition of a current tax asset is appropriate if tax laws require an entity to make an immediate payment in respect of a disputed amount. In the situation in the question, a tax examination results in an additional charge but the entity intends to appeal against the additional charge.
The Interpretations Committee noted that IAS 12 Income Taxes provides guidance on recognition in such a situation. However, the Interpretations Committee observed diversity in practice for various issues on the recognition and measurement of a tax liability or asset in circumstances in which there is uncertainty in the application of the tax law.
Consequently, the Interpretations Committee proposed the draft Interpretation”
Click here to be forwarded to the document “Draft IFRIC Interpretation DI/2015/1 - Uncertainty over Income Tax Treatments” as available on the website of the the IFRS Foundation and the IASB, which will open in a new window.
More background information on the project can be found here on the website of the the IFRS Foundation and the IASB.
Click here to be forwarded to the press release issued by the IFRS Foundation via which one can a.o. also obtain more information regarding the other proposed Interpretations of Standards (namely the one that addresses which exchange rate should be used to report foreign currency transactions when payment is made or received in advance)
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