IFRS news | 10 February 2016
IASB issues amendments to IAS 12
IASB issues amendments to IAS 12 to clarify the recognition of deferred tax assets for unrealised losses related to debt instruments measured at fair value.
The amendments clarify that unrealised losses on debt instruments measured at fair value in the financial statements but at cost for tax purposes can give rise to deductible temporary differences.
The amendments also clarify that: the carrying amount of an asset does not limit the estimation of probable future taxable profits; and that when comparing deductible temporary differences with future taxable profits, the future taxable profits excludes tax deductions resulting from the reversal of those deductible temporary differences.
The amendments are to be applied retrospectively and are effective from 1 January 2017 with earlier application permitted.