Commission Regulation (EC) No 1126/2008Show full title

Items [F1 recognised outside profit or loss] U.K.

F2 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.K.

Textual Amendments

F2 Deleted by Commission Regulation (EC) No 1274/2008 of 17 December 2008 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Accounting Standard (IAS) 1 (Text with EEA relevance).

[F3 61A Current tax and deferred tax shall be recognised outside profit or loss if the tax relates to items that are recognised, in the same or a different period, outside profit or loss. Therefore, current tax and deferred tax that relates to items that are recognised, in the same or a different period: U.K.

(a)

in other comprehensive income, shall be recognised in other comprehensive income (see paragraph 62).

(b)

directly in equity, shall be recognised directly in equity (see paragraph 62A).]

Textual Amendments

F3 Inserted by Commission Regulation (EC) No 1274/2008 of 17 December 2008 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Accounting Standard (IAS) 1 (Text with EEA relevance).

[F1 62 International Financial Reporting Standards require or permit particular items to be recognised in other comprehensive income. Examples of such items are: U.K.

(a)

a change in carrying amount arising from the revaluation of property, plant and equipment (see IAS 16); and

(b)

[deleted]

(c)

exchange differences arising on the translation of the financial statements of a foreign operation (see IAS 21).

(d)

[deleted]]

[F3 62A International Financial Reporting Standards require or permit particular items to be credited or charged directly to equity. Examples of such items are: U.K.

(a)

an adjustment to the opening balance of retained earnings resulting from either a change in accounting policy that is applied retrospectively or the correction of an error (see IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ); and

(b)

amounts arising on initial recognition of the equity component of a compound financial instrument (see paragraph 23).]

[F1 63 In exceptional circumstances it may be difficult to determine the amount of current and deferred tax that relates to items recognised outside profit or loss (either in other comprehensive income or directly in equity). This may be the case, for example, when:] U.K.

(a)

there are graduated rates of income tax and it is impossible to determine the rate at which a specific component of taxable profit (tax loss) has been taxed;

(b)

a change in the tax rate or other tax rules affects a deferred tax asset or liability relating (in whole or in part) [F1 to an item that was previously recognised outside profit or loss; or]

(c)

an entity determines that a deferred tax asset should be recognised, or should no longer be recognised in full, [F1 and the deferred tax asset relates (in whole or in part) to an item that was previously recognised outside profit or loss.]

[F1 In such cases, the current and deferred tax related to items that are recognised outside profit or loss are based on a reasonable pro rata allocation of the current and deferred tax of the entity in the tax jurisdiction concerned, or other method that achieves a more appropriate allocation in the circumstances.]

64 IAS 16 does not specify whether an entity should transfer each year from revaluation surplus to retained earnings an amount equal to the difference between the depreciation or amortisation on a revalued asset and the depreciation or amortisation based on the cost of that asset. If an entity makes such a transfer, the amount transferred is net of any related deferred tax. Similar considerations apply to transfers made on disposal of an item of property, plant or equipment. U.K.

65 When an asset is revalued for tax purposes and that revaluation is related to an accounting revaluation of an earlier period, or to one that is expected to be carried out in a future period, the tax effects of both the asset revaluation and the adjustment of the tax base are [F1 recognised in other comprehensive income] in the periods in which they occur. However, if the revaluation for tax purposes is not related to an accounting revaluation of an earlier period, or to one that is expected to be carried out in a future period, the tax effects of the adjustment of the tax base are recognised in [F1 profit or loss]. U.K.

65A When an entity pays dividends to its shareholders, it may be required to pay a portion of the dividends to taxation authorities on behalf of shareholders. In many jurisdictions, this amount is referred to as a withholding tax. Such an amount paid or payable to taxation authorities is charged to equity as a part of the dividends. U.K.

Textual Amendments

F1 Substituted by Commission Regulation (EC) No 1274/2008 of 17 December 2008 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Accounting Standard (IAS) 1 (Text with EEA relevance).