IFRIC 23 (IAS 12 LINK)

REASON FOR IT?

suggests which recog & meaure. requirements of IAS 12 to apply when there's uncertainty over inc tax

disclosures ito IAS 1 & 12

excl "other taxes, levies, interest & penalties" not in IAS 12 scope

ACCOUNTING FOR IT

likelihood of tax treatment
acceptance?

Probable

  • measure in line w/ inc tax filings

Not Probable

  • measure amts w/ method giving
    better prediction:

Most likely amount

Expected value
(probabilities)

TRANSITION CONSIDERATIONS

1.Modified Retrospective

  • adj O/B of equity as at initial application date
  • don't restate previous cumm amts (leave as IAS 37)

2.Full retrospective application

TALKING POINTS

Change in facts & circumstances

  • considered change in estimates ito IAS 8

Detection Risk

  • assume that SARS will detect any issues

Covers Tax (A)s & (L)s

  • IAS 37 would only recog contingent (A)s w/ virtual certainty BUT IFRIC 23 just requires probability

Penalties, Interest, Levies, Other Taxes

  • normally IAS 37 deals w/ them

What was the treatment before?

  • w/ IAS 37 when we didn't think tax authorities would select us, we wouldn't think we'd have a present obligation & outflow for taxes txs
  • Implication - realise a provision of zero