IAS 12 - Income Taxes
Financial Dictionary — IFRS & IAS Standards
Definition
IAS 12 addresses the accounting for current tax and deferred tax. Deferred tax arises from temporary differences between the carrying amounts of assets and liabilities and their tax bases.
Detailed Explanation
IAS 12 explains accounting for current and deferred income taxes. Deferred tax arises from temporary differences and is measured based on expected tax rates when differences reverse.
Common Uses
- Used when applying IFRS/IAS requirements for recognition, measurement, presentation, or disclosure.
- Used to justify accounting treatments in working papers and financial statement notes.
- Used to justify accounting treatments in working papers and financial statement notes.
Practical Example
- Example: When preparing year-end reporting, management applies **IAS 12 - Income Taxes** to determine the correct IFRS treatment and disclosures.
Why This Term Matters
- Why it matters: Ensures compliance with IFRS, improves comparability across periods and entities, and reduces financial reporting risk.