Recent amendment announcement for IAS-12 – ” Taxes on Income”- 12 Dec 2017 – ज्ञान -Gyan"IFRS"

Recent amendment announcement for IAS-12 – ” Taxes on Income”- 12 Dec 2017

IASB (International Accounting Standard Board) does its annual exercise for finalizing/ accepting certain amendments in accounting standards. As a part of this improvement cycle, IASB recently has issued certain amendments in which we gonna discuss now about an amendment which has been made in IAS-12 – Taxes on Income (Indian standard Ind-As 12, however ICAI still to notify these changes for India) –

Recent change in IAS-12 –

“A company accounts for all income tax consequences of dividend payments in the same way”

refer  http://www.ifrs.org/news-and-events/2017/12/international-accounting-standards-board-issues-annual-improvements-to-ifrs-standards/

What does it mean for an entity:

There are many instances where a Financial Instrument gets classified either debt or equity or could one of FI which is classified under OCI, IASB has clarified that whenever there is a dividend payment made, the related income tax would be account in same way as the source of DIVIDEND which resulted from such financial instrument and hence the related income tax would also be accounted in the same way as the Instrument was account initially. e.g. if the source of payment of dividends are from such Instrument which is FVOCI then related income tax also should be accounted in OCI only….

IASB has stated that the such amendment is applicable from 1-1-2019 however earlier application is permitted.

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