(Summary) Ind AS 12
To prescribe accounting treatment for income taxes.
Apply this standard in accounting for income taxes.
- Current tax
- Temporary differences
- Deferred tax assets
- Deferred tax liabilities
- Accounting profit
- Taxable profit
- Tax base
- Unpaid taxes (current) related to current or prior periods shall be recognised as a liability.
- If amount already paid exceeds amount due, then recognise the excess as an asset.
- Tax loss that can be carried back to recover current tax of previous period shall be recognized as an asset.
- Taxable temporary differences
- Deductible temporary differences
A DTA shall be recognized to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised.
Recognise a DTL for all taxable temporary differences associated with investments in subsidiaries, etc., except when both of the following conditions are satisfied:
- The parent, investor, JV or joint operator is able to control the timing of the reversal of the temporary difference; and
- It is probable that the temporary difference will not reverse in the foreseeable future.
An entity shall recognise a DTA for all deductible temporary differences arising from investments in subsidiaries, etc. to the extent that, it is probable that:
The temporary difference will reverse in the foreseeable future; and
Taxable profit will be available against which the temporary difference can be utilised.
Current tax liabilities (assets) for the current and prior periods shall be measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on Tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
DTA & DTL shall not be discounted.
Current and deferred tax shall be recognized as income or an expense and included in profit or loss for the period, with two exceptions.
Tax assets and tax liabilities
Offset CTA and CTL if, and only if, the entity:
Has a legally enforceable right to set off the recognized amounts; and
Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Entity shall offset DTA & DTL if, and only if:
The entity has a legally enforceable right to set off current tax assets against current tax liabilities;
The DTA and DTL relate to income taxes levied by the same taxation authority.
The tax expense (income) related to profit or loss from ordinary activities shall be presented as part of profit or loss in SOPL.
- The major components of tax expense (income) shall be disclosed separately.
- There are a number of Additional disclosures.