IASB ED/2019/5

  • For-profit

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Proposed amendments to IAS 12)

The IASB has recently issued an exposure draft, ED/2019/5 Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Proposed amendments to IAS 12).

The aim of the proposed amendments is to clarify how entities account for deferred tax on leases (accounted for under IFRS 16 Leases) and decommissioning obligations.

In specific circumstances, entities are exempt from recognising deferred tax when they recognise assets or liabilities for the first time (sometimes called “the initial recognition exemption”). There has been uncertainty about whether the exemption applies to leases and decommissioning obligations. To promote consistent application of IAS 12, the IASB has proposed narrow-scope amendments.

Under the proposals, the exemption in IAS 12 would not apply to particular transactions for which entities recognise both an asset and a liability (for example, leases and decommissioning obligations). The proposals would result in entities recognising deferred tax on such transactions.


Accessing the Consultation Document

IASB ED 2019/5   [link to IASB] 


Submissions closed on 14 November 2019