AASB 112 - Income Taxes

Interpretations relating to AASB 112 Income Taxes are listed below:

Interpretation 7
Applying the Restatement Approach under AASB 129 Financial Reporting in Hyperinflationary Economies

Operative date: 1 March 2006
Issue date: February 2005

When hyperinflation is first identified, AASB 129 is applied as if the economy had always been hyperinflationary. It provides guidance on how this is applied, including the restatement of deferred tax items.

Related AASB Standards: AASB 112, AASB 129.

Interpretation 125
Income Taxes – Changes in the Tax Status of an Entity or its Shareholders

Operative date: 1 January 2005
Issue date: July 2004

When there is a change the tax status of an entity or its shareholders, the current and deferred tax consequences are recognised in profit or loss, unless those consequences relate to transactions that result in a charge to equity, in which case the tax consequences are recognised directly in equity.

Related AASB standards: AASB 112.

Interpretation 1003
Australian Petroleum Resource Rent Tax

Operative date: Ending 30 June 2008
Issue date: November 2007

The Australian Petroleum Resource Rent Tax falls within the scope of AASB 112 Income Taxes, and is thus considered an income tax.

Related AASB standards: AASB 108, AASB 112.

Interpretation 1039
Substantive Enactment of Major Tax Bills in Australia

Operative date: 1 January 2005
Issue date: July 2004

A tax Bill must be taken into account in the recognition and measurement of deferred tax assets and liabilities only when the Bill has been enacted or substantively enacted prior to or on the reporting date. Substantive enactment occurs when the Bill has been tabled in Parliament and there is majority support through both Houses of Parliament.

Related AASB standards: AASB 110, AASB 112.

Interpretatation 1052
Tax Consolidation Accounting

Operative date: Ending 31 December 2005
Issue date: June 2005

This Interpretation specifies the accounting of a tax consolidated group, which includes:
- All Tax Funding Arrangement (TFA) amounts are recognised as inter-entity balances
- Each subsidiary in the group must recognise its own current and deferred taxes
- Consolidated current and deferred tax amounts for the group is allocated using a systematic approach consistent with the principles of AASB 112 Income Taxes, such as the ‘stand-alone taxpayer’ approach and the ‘separate taxpayer within group’ approach
- Current tax liabilities (or assets) and deferred tax assets recognised by a subsidiary for the period are transferred to the head entity
- Differences between the amounts transferred and amounts contributed under a TFA will be recognised in equity.
Related AASB standards: AASB 1, AASB 112, AASB 118, AASB 124, AASB 127, AASB 137.