IT Accounting under IFRS and US GAAP

Even though IFRS and US GAAP have similar treatment of income tax issues, there are some differences. These differences are summarized below:

Recognition of deferred tax assetsRecognized in full (except for certain outside basis differences), but valuation allowance reduces asset to the amount that is more likely than not to be realized.Amounts are recognized only to the extent it is probable (similar to ―more likely than not under US GAAP) that they will be realized.
Calculation of deferredtax asset or liabilityEnacted tax rates must be used.Enacted or ―substantively enacted tax rates as of the balance sheet date must be used.
Classification of deferredtax assets and liabilitiesin balance sheetCurrent or non-current classification, based on the nature of the related asset or liability, is required.All amounts classified as non-current in the balance sheet.
Recognition of deferredtax liabilities frominvestments insubsidiaries or joint
ventures (JVs) (often
referred to as outside
basis differences)
Recognition not required for investment in a foreign subsidiary or corporate JV that is essentially permanent in duration, unless it becomes apparent that the difference will reverse in the foreseeable future.Recognition required unless the reporting entity has control over the timing of the reversal of the temporary difference and it is probable (―more likely than not) that the difference will not reverse in the foreseeable future.
Revaluation of fixed assetsand intangible assetsNot applicable, no revaluation allowed.Deferred taxes are recognized in equity.

Related Downloads

Related Quizzes

Income Taxes
Learn the skills required to excel in data science and data analytics covering R, Python, machine learning, and AI.

Free Guides - Getting Started with R and Python

Enter your name and email address below and we will email you the guides for R programming and Python.

Saylient AI Logo

Take the Next Step in Your Data Career

Join our membership for lifetime unlimited access to all our data analytics and data science learning content and resources.