The objective of IAS 12 is to prescribe the accounting treatment for income taxes, for both current and future tax consequences. These should be accounted for in the same way as the transactions and other events themselves i.e. if transactions are recorded in the income statement, then so should be any related tax effect.
IAS 12 applies in accounting for income taxes, and this includes all domestic and foreign taxes based on taxable profits. It does not cover government grants. These are covered by IAS 20.
Accounting profit: net profit or loss for a period before deduction of tax.
Taxable profit: profit for the period determined in accordance with the rules established by the tax authorities upon which income taxes are payable.
Tax expense: the aggregate amount included in net profit for the period for current and deferred tax.
Current tax: the amount of income taxes payable in respect of the taxable profit for the period.
Deferred tax liabilities: the amounts of income taxes payable in future periods in respect of temporary timing differences.
Deferred tax assets: the amounts of income taxes recoverable in future periods in respect of:
deductible temporary differences;
the carry forward of unused tax losses;
the carry forward of unused tax credits.
Temporary differences: these are differences between the carrying amount of an asset or liability in the balance sheet and its tax base. They can...
TABLE OF CONTENTS 
