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This IASB Update highlights preliminary decisions of the International Accounting Standards Board (IASB). Projects affected by these decisions can be found on the work plan. The IASB's final decisions on IFRS® Accounting Standards, Amendments and IFRIC® Interpretations are formally balloted as set out in the IFRS Foundation's Due Process Handbook.

The IASB met remotely for a supplementary meeting on 11 April 2023.

Contents

Maintenance and consistent application

Maintenance and consistent application

Supplementary IASB Update April 2023—International Tax Reform—Pillar Two Model Rules

The IASB met to consider feedback on its Exposure Draft International Tax Reform—Pillar Two Model Rules, which proposed amendments to IAS 12 Income Taxes; and to decide how to proceed with the project.

Temporary exception to deferred tax accounting (Agenda Paper 12A)

The IASB discussed its proposals to introduce a temporary exception to the requirements in IAS 12 for an entity to recognise and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.

The IASB tentatively decided to finalise its proposals:

  1. to introduce the temporary exception;
  2. to make the temporary exception mandatory; and
  3. not to specify how long the temporary exception will be in place.

All 13 IASB members present agreed with these decisions. One member was absent.

The IASB also tentatively decided:

  1. to make no change to the scope of the temporary exception.
    All 13 IASB members present agreed with this decision. One member was absent.
  2. to finalise the proposal to require an entity to disclose that it has applied the temporary exception.
    Eight of 13 IASB members agreed with this decision. One member was absent.

Disclosures (Agenda Paper 12B)

The IASB discussed its proposals to require an entity to disclose specific information to users of financial statements before and after the Pillar Two model rules are in effect.

The IASB tentatively decided to require that, for periods in which Pillar Two legislation is enacted or substantively enacted but not yet in effect, an entity:

  1. disclose information that helps users of financial statements understand the entity’s exposure to Pillar Two income taxes arising from that legislation.
    Eleven of 13 IASB members present agreed with this decision. One member was absent.
  2. meet that disclosure objective by disclosing known or reasonably estimable qualitative and quantitative information about its exposure at the end of the reporting period. That information does not need to reflect all the specific requirements of the legislation and could be provided in the form of an indicative range. To the extent information is not known or reasonably estimable, an entity would instead be required to disclose a statement to that effect.
    Ten of 13 IASB members present agreed with this decision. One member was absent.

The IASB also tentatively decided to require that, to the extent information is not known or reasonably estimable, an entity disclose information about the progress the entity has made in assessing its exposure to Pillar Two income taxes.

All 13 IASB members present agreed with this decision. One member was absent.

The IASB tentatively decided to finalise the proposal to require an entity to disclose separately its current tax expense (income) related to Pillar Two income taxes.

Twelve of 13 IASB members present agreed with this decision. One member was absent.

Transition and effective date (Agenda Paper 12C)

The IASB discussed its proposals for transition to, and the effective date of, the amendments.

The IASB tentatively decided to finalise the proposal to require an entity to apply the temporary exception—and to disclose that it has applied the exception—immediately upon issue of the amendments and retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

Twelve of 13 IASB members present agreed with this decision. One member was absent.

The IASB also tentatively decided:

  1. to finalise the proposal to require an entity to apply the disclosure requirements (other than the requirement to disclose that the entity has applied the exception) for annual reporting periods beginning on or after 1 January 2023; and
  2. to specify that an entity is not required to apply the disclosure requirements (other than the requirement to disclose that the entity has applied the exception) in interim financial reports for interim reporting periods ending on or before 31 December 2023.

All 13 IASB members present agreed with these decisions. One member was absent.

Due process (Agenda Paper 12D)

The IASB discussed due process steps and the request for permission to ballot amendments to IAS 12.

The IASB decided to finalise the amendments without re-exposure.

All 13 IASB members present agreed with this decision. One member was absent.

One IASB member indicated an intention to dissent from issuing the amendments.

All 13 IASB members present confirmed they were satisfied that the IASB has complied with the applicable due process requirements and has undertaken sufficient consultation and analysis to begin the process for balloting the amendments. One member was absent.

Next step

The IASB expects to issue the amendments in the second half of May 2023.