SOCPA Approves Amendment to IAS 12 and Section 29 of the IFRS for SMEs
SOCPA, represented by the Accounting Standards Board, has approved the amendment made by the International Accounting Standards Board (IASB) to International Accounting Standard (IAS) 12 "Income Taxes" and Section 29 of the International Financial Reporting Standard (IFRS) for Small and Medium-sized Entities (SMEs).
The purpose of this amendment is to grant an exception to entities from the requirement to recognize or disclose deferred taxes resulting from the application of tax laws that may be imposed by participating countries under the "International Tax Reform—Pillar Two Model Rules" document issued by the Organisation for Economic Co-operation and Development (OECD). Conversely, the amendment introduces disclosure requirements regarding the entity's application of the exception, the amount of income tax arising from the application of laws related to the international tax reform document, and other related information upon issuance and before their application.
SOCPA, through the Accounting Standards Board, had previously commented on the proposed amendment, expressing agreement with the proposed exception for the reasons stated in the amendment project. However, SOCPA provided several observations on the proposed disclosures, noting that these disclosures are not defined in a way that facilitates consistent application and comparison between entities. Additionally, some of the proposed disclosures require further clarification, especially considering that taxes may be classified at the consolidated level as income taxes while they might be different at the subsidiary level. The Board responded to these observations by revising the relevant section accordingly.
The full amendment can be accessed here.