RegulationAccounting StandardsUS set to adopt first international standard

US set to adopt first international standard

The IASB is likely to require companies to factor the potential uncertainty of a tax position, regardless of how small this may be

The US standard setters are set to adopt their first IFRS rule wholesale into
US accounting, in the form of IAS 12, which deals with tax.

But the standard could leave investors uncertain as to how tax positions
would be accounted for, since the US standard, FIN 48, tells companies how to
account for uncertainty in tax positions, and specifically requires companies to
include information about potential tax liabilities – information previously
hidden with other potential liabilities.

But IFRS does not have a recognition threshold. The IASB, CFO.com reported,
is likely to require companies to factor the potential uncertainty of a tax
position, regardless of how small this may be, into the amount of taxes reported
on the financial statement.

The way in which this liability is measured could also differ from US
standards.

The Financial Accounting Standards Board is expected to announce a resolution
in the next few months.

Further reading:

Make-believe world of tax

Related Articles

EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

4d Emma Smith, Managing Editor
The great professional services shake-up

Accounting Standards The great professional services shake-up

4w Fergus Payne, Lewis Silkin
What do clients actually want from an accountant?

Accounting Standards What do clients actually want from an accountant?

2m Emma Smith, Managing Editor
IASB overhauls insurance accounting with issuance of IFRS 17

Accounting Standards IASB overhauls insurance accounting with issuance of IFRS 17

5m Alia Shoaib, Reporter
Flag It Up! How accountants can protect themselves from money launderers

Accounting Standards Flag It Up! How accountants can protect themselves from money launderers

7m Emma Smith, Managing Editor
Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

Accounting Standards Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

3m Alison Conley
Membership of the accountancy profession on the rise

Accounting Standards Membership of the accountancy profession on the rise

3m Alia Shoaib, Reporter
The real price of mates' rates in the provision of professional services

Accounting Standards The real price of mates' rates in the provision of professional services

4m DAC Beachcroft