IAS 12 Income Taxes
IAS 12 Income Taxes prescribes the accounting treatment for income taxes, including how to account for the current and future tax consequences of assets, liabilities and transactions recognised in the financial statements.
Published October 1996. Effective 1 January 1998.
Contents
Free to view
- Synopsis (including link to unaccompanied version of IAS 12)
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Related IFRICs
Financial Reporting Faculty members only
Synopsis
- Current tax for the current and prior periods is recognised as a liability to the extent that it remains outstanding, or an asset, to the extent that amounts paid are in excess of that due. It should be recognised using the tax rates that have been enacted or substantively enacted by the reporting date.
- Deferred tax liabilities are recognised for taxable temporary differences
- Deferred tax assets are recognised for deductible temporary differences and unused tax losses and credits to the extent that a taxable profit will be available against which they can be utilised.
- Deferred tax assets and liabilities should be measured at the tax rates expected to apply to the date when the liability is settled or asset realised.
Which version of the standard?
'Which version of the standard?' is only available to members of the Financial Reporting Faculty. Please note that to access electronic versions of IFRS through the links in these standard trackers you need to have first logged into eIFRS.
| Annual period starts |
Effective version of standard |
Notes on amendments |
|---|---|---|
| On or after 1 January 2023 | IAS 12 2021 Required Standards and Deferred Tax related to Assets and Liabilities arising from a Single Transaction* | Includes amendments 1, 2, 3, 4 and 5* |
| 1 January 2019 - 31 December 2022 | IAS 12 2021 Required Standards |
Includes amendments 1 – 4 |
| 1 January 2018 – 31 December 2018 |
IAS 12 2018 Required Standards |
Includes amendments 1 - 2 |
*Not UK endorsed as at 23 June 2021. Read more on UK endorsement of IFRS standards. Not EU endorsed as at 23 June 2021. Read more on EU endorsement of IFRS standards.
The Required Standards book for a particular year assumes that there is no early application of issued but not yet effective IFRSs; The Issued Standards book assumes early application of all issued IFRSs.
For the latest version of the standard, and where the amendments are to be adopted early, refer to IAS 12 2021 Required Standards and Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
Recent amendments
Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.
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1. IFRS 9 Financial Instruments amendment to IAS 12
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Effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted.
As a result of the issue of IFRS 9.
IAS 12 is amended to delete reference to assets revalued in accordance with IAS 39 and instead refer to assets revalued in accordance with IFRS 9.
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2. IFRS 15 Revenue from Contracts with Customers amendments to IAS 12
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Effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted.
As a result of the issue of IFRS 15, IAS 12 is amended to refer to accounting for interest, dividend and royalty revenue in line with the new standard.
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3. IFRS 16 amendment to IAS 12
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To be applied to periods beginning on or after 1 January 2019. Earlier adoption is permitted.
IAS 12 is amended to include reference to IFRS 16 in respect of assets carried at fair value.
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4. Annual Improvements 2015-17
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To be applied to periods beginning on or after 1 January 2019. Earlier adoption is permitted.
An amendment to IAS 12 clarifies that the presentation requirements of paragraph 52B of IAS 12 apply to all payments on financial instruments classified as equity that are distributions of profits and are not limited to the circumstances described in paragraph 52A of IAS 12.
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5. Deferred Tax related to Assets and Liabilities arising from a Single Transaction*
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Effective for annual periods beginning on or after 1 January 2023. Earlier application is permitted.
The amendments to IAS 12 clarify that the IAS 12 initial recognition exemption is not applicable to transactions, such as lease arrangements and decommissioning provisions, that give rise to both an asset and a liability, to the extent that amounts recognised in respect of taxable and deductible temporary differences are the same.
*Not UK endorsed as at 23 June 2021. Read more on UK endorsement of IFRS standards. Not EU endorsed as at 23 June 2021. Read more on EU endorsement of IFRS standards.
The following interpretations refer to IAS 12
- IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies
Provides guidance on the restatement of financial statements when hyperinflation is initially identified. -
IFRIC 21 Levies
Provides guidance on when to recognise a liability for a levy imposed by a government. -
IFRIC 23 Uncertainty over Income Tax Treatments
Clarifies how to apply the recognition and measurement requirements of IAS 12 when there is uncertainty over income tax treatments. -
SIC 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders
Addresses the deferred tax consequences of changes in tax status of an enterprise or its shareholders.
Other resources
Factsheets:
- 2017 IFRS Accounts and 2019 IFRS accounts
Provide more information on amendment 5.
This page was last updated 23 June 2021
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