Highlights
The Accounting Standards Board (AcSB) proposes, subject to comments received following exposure, to incorporate into Part I of the CPA Canada Handbook – Accounting, amendments to IAS 12 Income Taxes.
This AcSB Exposure Draft reflects proposals made by the International Accounting Standards Board (IASB) that the AcSB intends to adopt, subject to deliberating comments received, as Canadian generally accepted accounting principles.
Comments are requested from individuals and organizations who agree with the Exposure Draft proposals as well as from those who do not. Comments are most helpful if they relate to a specific paragraph or group of paragraphs. Any comments that express disagreement with the proposals should clearly explain the problem and include a suggested alternative, supported by specific reasoning.
Comments received on the AcSB Exposure Draft will be available on the website shortly after the comment deadline unless confidentiality is requested. The request for confidentiality must be stated explicitly within the response.
IASB® Exposure Draft
The IASB recently issued the Exposure Draft, “International Tax Reform – Pillar Two Model Rules,” which is available on the IASB website at www.ifrs.org.
The IASB’s Exposure Draft responds to stakeholders’ concerns about the potential implications of the imminent implementation of the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two model rules on accounting for income taxes. The Exposure Draft proposes amendments to provide a temporary exception from accounting for deferred taxes arising from the implementation of the Pillar Two model rules and to introduce targeted disclosure requirements for affected companies. The exception would apply until the IASB either removes the exception or makes it permanent.
The IASB proposes that an entity would be required to apply the proposed amendments to introduce the temporary exception, and to require an entity to disclose the fact that it has applied the exception, immediately upon the issuance of the amendments and retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The remaining proposed disclosure requirements would apply for annual reporting periods beginning on or after January 1, 2023.
Comments Requested
The AcSB encourages Canadian stakeholders to respond to the IASB on its Exposure Draft. Specific questions on which the IASB would like input are provided in the Invitation to Comment in its Exposure Draft. The AcSB requests that comment letters be sent directly to the IASB with a copy to the AcSB.
The AcSB would like input from Canadian respondents on the following additional questions regarding the proposed amendment:
The IASB has developed the proposed standard in accordance with its due process for application around the world. Assuming the Exposure Draft proposals are finalized and approved by the IASB in accordance with its due process, do you think that the proposals are appropriate for application in Canada? If not, please specify which aspects of the proposals, and what circumstances, make the accounting requirements proposed in the Exposure Draft inappropriate.
Send responses to these additional questions directly to the AcSB.