On 30 August 2021, Treasury registered the latest compilation of Accounting Standard AASB 112 – Income Taxes. This compilation incorporates relevant amendments made up to and including 6 March 2020.

See below for further detail.

[Tax Month – August 2021]

 


 

AASB 112 Income Taxes prescribes the accounting treatment for income taxes.

  • The principal issue in accounting for income taxes is how to account for the current and future tax consequences of the future recovery (settlement) of the carrying amount of assets (liabilities) that are recognised in an entity’s statement of financial position, and transactions and other events of the current period that are recognised in an entity’s financial statements.
  • For the purposes of the Standard, income taxes include all domestic and foreign taxes which are based on taxable profits.
  • Income taxes also include taxes, such as withholding taxes, which are payable by a subsidiary, associate or joint arrangement on distributions to the reporting entity.
  • The Standard also deals with the recognition of deferred tax assets arising from unused tax losses or unused tax credits, the presentation of income taxes in the financial statements and the disclosure of information relating to income taxes.

DATE OF EFFECT: The compiled Standard applies to annual periods beginning on or after 1 July 2021 but before 1 January 2023. Earlier application is permitted for annual periods beginning after 24 July 2014 but before 1 July 2021.

[Accounting Standard AASB 112 – Income Taxes; LTN 167, 31/8/21]

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