Magazine article The CPA Journal

The International Accounting Standard Setting Scene

Magazine article The CPA Journal

The International Accounting Standard Setting Scene

Article excerpt

The Board of the International Accounting Standards Committee met in Barcelona. Spain, September 23-28. At the meeting, the board approved a revised International Accounting Standard No. 12 on income taxes along the lines of FASB Statement 109. Deferred tax liabilities would be accrued for nearly all taxable temporary differences. Deferred tax assets would be recognized for nearly all deductible temporary differences if it is probable that a tax benefit will be realized. Probability of realization would also determine accrual of unused tax losses and tax credits. Deferred tax assets and liabilities would be measured at undiscounted settlement amounts using tax rates expected at settlement.

The board also approved an Exposure Draft on employee benefits that would require recognition of all benefit costs during the employees' periods of service. Pension cost would be recognized using the projected unit credit method; projected benefit methods would not be permitted. Pension plan assets would be measured at fair value. Two alternative treatments for past service cost are identified: (1) full immediate recognition and (2) straight-line amortization over the expected remaining working lives of current employees but with immediate recognition for increases to past service cost relating to former employees. …

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