07 May IASB clarifies the accounting for deferred tax on leases and decommissioning obligations
May 7, 2021 – Amendments have been issued to IAS 12 – the IFRS standard on income taxes.
IAS 12 Income Taxes
IAS 12 Income Taxes specifies how firms account for income tax, including deferred tax. Exemptions sometimes apply when recognizing assets or liabilities for the first time. There is uncertainty about whether an exemption applies to leases and decommissioning obligations: transactions for which companies recognize both an asset and a liability.
Clarifies the exemption does not apply and that firms are required to recognize deferred tax. Aims to reduce diversity in deferred tax reporting on leases and decommissioning.
Effective for annual reporting periods from January 1, 2023 with early application permitted.
For more information, visit www.ifrs.org.