Income Taxes in 2020

To view free IFRS IAS resources on Taxonomy, click here.

With all the focus on leases this year, income tax is getting pushed to the side.

However, there are three things about IFRS IAS income tax that require attention when setting up reports for the year gone by.

•  Recoverability of Deferred Tax Assets.
  The capacity of an organization to produce adequate profits later on is not a new concept. Being able to give straightforward disclosures about evaluations is very significant.
  
  
•  Presentation of Tax Impacts.
  Note the new requirements for payments to financial instruments. This applies to those that are liable for tax but are typically equity for accounting. Upon issuance of these instruments, decide on whether the definition of a dividend is met by the payments to the holders. Always give straightforward disclosures.
  
  
•  Uncertain Tax Treatments.
  Uncertain tax treatment affect current and deferred tax so do not put them on their own line on the balance sheet. Distinguish the new requirements and give straightforward disclosures about assessments.
  

Keep these three principles in mind when setting up 2019’s income statements and always give straightforward disclosures.

For more information from The IFRS Foundation on taxes, click here.