1. Working with Tax Reporting
  2. Working with National Tax Process
  3. Working with National Deferred Tax
  4. Working with Balance Sheet and Profit and Loss (P&L) Approach in Tax Reporting
  5. Summarizing the Reporting Basis and Approach

Summarizing the Reporting Basis and Approach

IFRS – IAS 12

  • Comprehensive Balance Sheet approach prescribed
  • Difference between the Book and Tax basis of Assets and Liabilities gives rise to future tax assets and liabilities
  • Typically performed at provision time
  • Results in the pre-tax closing balance for temporary differences
  • Typically validated again upon return submission
  • Squeeze and Pull rules are used in Tax Reporting

US GAAP – ASC 740

  • P&L approach generally followed
  • Supplemented by Tax Basis Balance Sheet preparation upon return submission
  • The change in the end of period over prior year-end in tax sensitive Balance Sheet Assets and Liabilities is recorded as the current year movement adjustment when determining taxable income
  • Movement rules are used in Tax Reporting