International


The IASB published for public comment an exposure draft, Deferred Tax: Recovery of Underlying Assets (tinyurl.com/37dtuo4), that would amend one aspect of IAS 12, Income Taxes.

 

The IASB said it set an exposure period of 60 days—shorter than its normal 120 days—because the amendments address a problem that needs to be solved as soon as possible. The board said the proposed amendments are straightforward and the ED is short.

 

Under IAS 12, the measurement of deferred tax liabilities and deferred tax assets depends on whether an entity expects to recover an asset by using the asset or by selling the asset. In some cases, it is difficult and subjective to assess whether recovery will be through use or through sale.

 

The proposed amendments state that, in specified circumstances, the measurement of deferred tax liabilities and deferred tax assets should reflect a rebuttable presumption that the carrying amount of the underlying asset will be recovered entirely by sale.

 

The specified circumstances are that the deferred tax liability or deferred tax asset arises from:

(a) Investment property, when an entity applies the fair value model in IAS 40, Investment Property; or

(b) Property, plant and equipment or intangible assets, when an entity applies the revaluation model in IAS 16, Property, Plant and Equipment, or IAS 38, Intangible Assets.

The presumption is rebutted only when an entity has clear evidence that it will consume the asset’s economic benefits throughout its economic life.

 

The comment period ended Nov. 9. The IASB will set an effective date for the proposed requirements when it approves the amendments.

 

More from the JofA:

 

 Find us on Facebook      Follow us on Twitter

 

SPONSORED REPORT

Keeping client information safe in an age of scams and security threats

A look at the Dirty Dozen tax scams and ways to protect taxpayer information.

TAX PRACTICE CORNER

More R&D tax help

"Can I use the R&D credit?" PATH Act enhancements make the credit more attractive to a wider range of taxpayers.

QUIZ

News quiz: Tax-related data breach explained

News about a data breach that affected about 100,000 people, the IRS’s budget for the fiscal year, and the 2018 health spending account limits received attention recently. See how much you know with this short quiz.