EFRAG completed its due process regarding the Amendments to IAS 12 Deferred Tax: Recovery of Underlying Assets (‘the Amendments’), and submitted its Endorsement Advice Letter and Effects Study Report to the European Commission.
The objective of the Amendments is to introduce an exception to the measurement principle in IAS 12, in the form of a rebuttable presumption that assumes that the carrying amount of an investment property measured at fair value will be recovered through sale and an entity will be required to use the tax rate applicable to the sale of underlying asset.
The Amendments become effective for annual periods beginning on or after 1 January, 2012. Earlier application is permitted, however entities shall disclose that fact.
EFRAG has carried out an evaluation of the Amendments. As part of that process, EFRAG issued its initial assessment for public comment and, when finalising its advice and the content of this letter, it took the comments received in response into account. EFRAG's evaluation is based on input from standard-setters, market participants and other interested parties, and its discussions of technical matters are open to the public.
EFRAG supports the Amendments and has concluded that they meet the requirements of the Regulation (EC) No. 1606/2002 of the European Parliament and of the Council on the application of international accounting standards.
Full paper
© EFRAG - European Financial Reporting Advisory Group
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article