Page 53 - FINAL CFA I SLIDES JUNE 2019 DAY 8
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LOS 30.j: Identify the key provisions of and differences
between income tax accounting under IFRS & US GAAP., p262 Session Unit 8:
30. Income Taxes
IFRS US GAAP
Revaluation of fixed assets Deferred taxes are recognised in equity Not applicable. No re-
and intangible assets valuation allowed.
Undistributed profit from an Deferred taxes are recognised unless the parent No deferred taxes for foreign
investment in a subsidiary is able to control the distribution of profit and subsidiaries that meet the indefinite
it is probable the temporary differences will not reversal criterion
reverse in future. No deferred taxes for domestic
tanties subsidiaries, if the amounts are tax-free!
Undistributed profit from an Deferred taxes are recognised unless the No deferred taxes for foreign
investment in Joint Venture (JV) venturer is able to control the sharing of profit corporate JVs that meet that meet
and it is probable the temporary differences will the indefinite reversal criterion
not reverse in future.
Undistributed profit from an Deferred taxes are recognised unless the Deferred taxes are recognised from
investment in an Associate firm investor is able to control the sharing of profit temporary differences.
and it is probable the temporary differences will
not reverse in future.
Deferred Tax Asset (DTA) Recognised if ‘’probable’’ that sufficient taxable Recognised in full and then reduced if
recognition profit will be available to recover the tax asset ‘’more likely than not’ that some or all of
the tax asset will be realised
Tax rate used to measure DTAs Enacted tax rate only
Enacted or subsequently enacted tax rate
Presentation of Deferred Taxes Classified as current non-current based
Classified as non-current
on the Balance Sheet On the classification of the underlying
asset or liability.
