IAS 12 Income Taxes

International Accounting Standard 12

Issued: in 1979; re-issued in 1996, followed by amendments
Effective date: 1 January 1998
What it does:
- It defines basic terms, such as accounting profit, taxable profit / loss, current tax, deferred tax, temporary differences, etc.
- It explains a tax base and contains the examples of its computation.
- It sets the recognition criteria of current and deferred tax liabilities and tax assets:
  - In relation to deferred tax liabilities arising from taxable temporary differences, IAS 12 requires recognition of deferred tax for all of them with certain exceptions and provides examples and further guidance.
  - In relation to deferred tax assets arising from deductible temporary differences, unused tax losses and unused tax credits, IAS 12 requires recognition of deferred tax only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilized, with certain exceptions.
- It prescribes rules on measurement of deferred tax assets and liabilities, recognition of current and deferred tax income and expense and presentation of current and deferred tax in the financial statements.
- It requires specific disclosures and brings illustrative examples in its appendices.

Summary of IAS 12 Income Taxes
Global Minimum Tax – Who? How? Any IFRS Impact? – learn to calculate global minimum tax step by step and learn what impact it has on the IFRS reporting
The Unconventional Guide to Tax Bases – very clearly explained how to determine the tax base of assets and liabilities
Deferred Tax: The Only Way to Learn It – a quick reading for quick understanding of the deferred tax concept.
Tax Reconciliation under IAS 12 With Example – one of the most difficult numerical disclosures explained clearly step by step
Tax Incentives – IAS 12 or IAS 20? – when to apply IAS 20 and when to apply IAS 12?

Deferred Tax When Different Tax Rates Apply – How to calculate deferred tax when different tax rates apply to the recovery of the same asset?
Are income tax advances financial instruments? – Should you apply IFRS 9 when accounting for income tax assets and liabilities?
Deferred tax asset on unused tax losses + Example

IFRS Kit – learn IFRS in 150+ videos, 150+ excel case studies, quizzes, certificates
Expected Credit Loss for Accountants – highly specialized course focused on ECL under IFRS 9 with step-by-step example related to trade receivables, many practical insights included.