PBR: Revenue defers tax effects of IAS39
The Inland Revenue has decided to defer the tax effects of IAS39 for those companies making the switch to international financial reporting standards.
In its Pre Budget Report document on the tax implications of IFRS, the Revenue focused heavily on issues surrounding the financial instruments standard, but admitted that it was too soon to be able to judge how this standard will affect its income streams.
As a result, the tax effect of most transitional adjustments had been put off until its impact was clearer.
‘The Inland Revenue clearly recognised they needed to defer finalising the IAS39 tax impacts because they haven’t been able to get that finally agreed in an appropriate timeframe to be effective from 1 January,’ said PricewaterhouseCoopers tax director Gillian Wild.
‘Given the uncertainty this brings, we may start to see some UK companies hesitating over when they adopt IFRS as a choice at entity level.’