2. June 2023
IASB proposes amendments to the IFRS for SMEs in the context of the OECD Pillar Two income taxes
The International Accounting Standards Board (IASB) has proposed amendments to the IFRS for SMEs Standard to align with similar amendments to IAS 12 Income Taxes. The amendments to IAS 12 were issued in May 2023 (we reported). The IASB is responding to stakeholders’ concerns about the potential implications of these rules for the accounting for income tax in financial statements.
The proposed amendments would:
- introduce a temporary exception to the requirements to recognise deferred tax assets and liabilities related to Pillar Two income taxes; and to disclose information that would otherwise be required by paragraphs 29.39–29.41 of the IFRS for SMEs Standard about deferred tax assets and liabilities related to Pillar Two income taxes;
- introduce targeted disclosure requirements for affected SMEs in periods when Pillar Two legislation is in effect; and
- clarify that ‘other events’ in the disclosure objective in paragraph 29.38 of the Standard include enacted or substantively enacted Pillar Two legislation.
The Exposure Draft is open for comment until 17 July 2023. The IASB aims to finalise any amendments in the third quarter of 2023, subject to comments on the Exposure Draft.