Ch 19 IFRS Insights

Question 0

IFRS VS GAAP: classification of deferred taxes

Answer 0

IFRS: always non current

GAAP: classifies deferred taxes based on classification of
Asset or liability to which it relates

Question 1

IFRS VS GAAP: Similarities of accounting for taxes

Answer 1

Similar to GAAP, IFRS uses asset and liability approach for

Recording deferred taxes

Question 2

IFRS VS GAAP: affirmative judgement approach

Answer 2

IFRS uses affirmative judgment approach, where a deferred
Tax asset is recognized up to amount that is probable to be
Realized

Question 3

IFRS VS GAAP: impairment approach

Answer 3

GAAP uses impairment approach

Where deferred tax asset is recognized in full, it is then
Reduced by a valuation account if it’s more likely than not
It won’t be realized

Question 4

IFRS VS GAAP: enacted tax rate

Answer 4

IFRS uses enacted tax rate or substantially enacted tax rate
(substantially means virtually certain)

GAAP must use enacted tax rate

Question 5

IFRS VS GAAP: tax effects related to certain items

Answer 5

IFRS reports under equity

GAAP charges or credits tax effects to income

Question 6

IFRS VS GAAP: assessing likelihood of uncertain tax positions

Answer 6

GAAP assess uncertain tax positions through audit

IFRS uses expected value approach to measure tax liability

Question 7

IFRS VS GAAP: potential liabilities

Answer 7

GAAP: must be accrued and disclosed if position is more
Likely than not to be disallowed

IFRS: potential liabilities must be recognized