IASB publishes narrow-scope amendments to IAS 12 "Income Taxes"
IAS 12 requires the recognition of deferred tax assets on all deductible temporary differences (with exceptions) to the extent that it is probable that taxable profit will be available against which the temporary difference can be utilized.
IAS 12 provides examples of deductible differences that may result in deferred tax assets. One such example relates to assets that are fair valued or revalued without an equivalent change to the tax base. Today’s amendment includes a new worked example concerning a debt instrument carried at fair value.
In addition, today’s amendment clarifies that any restriction in tax law which limits the utilization of losses to deduction against income of a certain type must be taken into account when assessing the extent to which a deferred asset should be recognized. This is important in those jurisdictions where tax relief for unrealized losses from investments that are marked to market, may only be utilized against similar marked to market gains.
Furthermore, the amendment allows that an estimate of probable future taxable profits may include the recovery of an asset for more than its carrying amount as long as there is sufficient evidence that it is probable that this will be achieved.
The amendment will be mandatory for accounting periods commencing on or after 1st January 2017, although earlier application is allowed. However, for entities reporting under EU requirements, the availability of early application is subject to the EU endorsement process.
Further details at IASB: