The Malaysian Accounting Standards Board (MASB) has today issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to MFRS 112 Income Taxes).
The Amendments is word-for-word Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes) issued by the International Accounting Standards Board (IASB).
ABOUT THE PRONOUNCEMENT
The Amendments to MFRS 112 specifies how companies should account for deferred tax on transactions such as leases and decommissioning obligation.
In specified circumstances, MFRS 112 exempts companies from recognising deferred tax when they recognise assets or liabilities for the first time. There had been some uncertainties about whether the exemption from recognising deferred tax applied to transactions such as leases and decommissioning obligations – transactions for which companies recognise both an asset and a liability.
The Amendments clarifies that the exemption does not apply and that companies are required to recognise deferred tax on such transactions. Such clarification is expected to reduce diversity in the reporting of deferred tax on leases and decommissioning obligations.
The Amendments to MFRS 112 shall apply for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted.
The “Notice of Issuance” can be downloaded here.
For enquiries, please contact: