Accounting for Uncertainties in Income Taxes


The Accounting Standards Board (AcSB) is participating in the IFRS Interpretations Committee’s project to provide guidance on how an entity should account for uncertainty over income tax treatments.

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IAS 12 Income Taxes includes requirements on the recognition and measurement of current or deferred tax liabilities or assets, but does not provide specific guidance on how uncertainty about a tax treatment should be reflected in the accounting for income tax. The objective of the project is to provide such guidance.

The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IFRS Interpretations Committee and issuing the AcSB’s own document for comment on each IFRS Interpretations Committee proposal.  Subject to the responses to the AcSB’s Draft Interpretation on whether the proposed Interpretation is appropriate for application in Canada, the AcSB expects that the IFRIC Interpretation will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRSs for publicly accountable enterprises.



Final IFRIC Interpretation – Uncertainty over Income Tax Treatments
June 9, 2017. The IASB has issued an Interpretation to specify how to reflect uncertainty in accounting for income taxes. The Interpretation is effective for annual reporting periods beginning on or after January 1, 2019 with earlier application permitted.

AcSB Response – Uncertainty over Income Tax Treatments
On January 19, 2016, the AcSB submitted a comment letter responding to the IFRS Interpretations Committee’s Draft Interpretation issued in October 2015.  The letter supports the proposals in the Draft Interpretation and includes several suggestions for the Committee to consider.  In particular, the letter encourages clarifying how new developments on uncertain income tax treatments arising after the reporting date should be reflected at the reporting date. Read the AcSB letter posted by the IASB. 

AcSB Decision Summary – January 12, 2016 
The AcSB approved its response letter to the IFRS Interpretations Committee’s Draft Interpretation, “Uncertainty over Income Tax Treatments,” subject to drafting changes.

AcSB Draft IFRIC Interpretation – Uncertainty over Income Tax Treatments 
November 12, 2015. The AcSB has issued a Draft Interpretation that corresponds to the proposed IFRIC Interpretation issued by the IASB’s IFRS Interpretations Committee on this topic. Stakeholders are encouraged to submit their comments, on the form provided, by January 19, 2016.

IASB Draft IFRIC Interpretation – Uncertainty over Income Tax Treatments
 October 26, 2015. The IASB’s IFRS Interpretations Committee has issued a Draft Interpretation to provide guidance when there is uncertainty in the application of the tax law. Canadian stakeholders are encouraged to submit their comments to the IFRS Interpretations Committee by January 19, 2016.

AcSB Decision Summary – October 20, 2015
The AcSB approved a policy for responding to draft Interpretations issued by the IFRS Interpretations Committee that is modelled on its policy for responding to IASB narrow-scope amendments. Both policies involve seeking feedback on proposals from members of its AcSB advisory committees, transition resource support groups and additional stakeholders, as appropriate, based on the significance of the topic. The approved policy will be applied to recently issued and future draft Interpretations.


Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.