IFRS IC agenda decision - IAS 12 Income Taxes: rebuttable presumption to determine the manner of recovery
- Isabel Batista
In September 2011, the Interpretations Committee received a request to clarify whether that presumption can be rebutted in cases other than the case described in paragraph 51C of the Amendments to IAS 12. The Interpretations Committee decided not to add this item to its agenda and noted that in its view paragraph 51C of IAS 12 (2010) is clear and that diversity in practice on the rebuttal of the presumption should not emerge. However, it also observed that, if the presumption is rebutted, the resulting deferred tax should reflect recovery of the carrying amount entirely through use, rather than be based on any dual purpose analysis.
EFRAG believes that the wording for rejection is in effect an interpretation. In EFRAG's view, rejection notices should not be written as though they were authoritative guidance and should not result in a change in accounting practice.
EFRAG issued its Final Comment Letter in October 2011. The project is now closed.