International Accounting Standard 12 (revised 1996): income taxes

Article Abstract:

International Accounting Standard (IAS) No. 12 (revised) provides accounting guidelines for income taxes. It replaces IAS 12, 'Accounting for Taxes on Income,' and will take effect for accounting periods commencing on or after Jan. 1, 1998. One of the changes introduced by the revised standard is the substitution of the balance sheet liability method for the deferral method in accounting for deferred tax. Reversing the original IAS 12, the new standard requires that the reporting entity recognize a deferred tax asset or liability for all temporary timing differences. The standard's provisions on recognition of current and deferred tax consequences of a transaction, of current tax liabilities and assets, of deferred tax liabilities and assets and discussed. Other issues addressed include measurement, presentation and disclosure.

Accounting and auditing, Income tax

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Not right now, but soon

Article Abstract:

A survey of French companies indicates that many of them are planning to adhere to international accounting standards (IAS) in the near or medium term. Majority of the respondents are currently using French generally accepted accounting principles (GAAP), but two-thirds of them refer to US GAAP or the international accounting standards if the French GAAP if the French GAAP is silent on certain technological issues. The reasons often cited for adopting (IAC) and US GAAP were the desire for a stock market listing or financing overseas (40%), improved quality of financial information (24%), an enhanced corporate image (16%), and better internal management of international companies (10%). A new draft legislation that was first proposed in 1996 seeks to facilitate use of US GAAP and IAS by certain French companies.

France

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The Singapore experience

Article Abstract:

No universal financial reporting language exists at present but this situation may not last very long. The GAAP reconciliation required by the US SEC for foreign companies applying for a listing on a US stock exchange emphasizes the importance of a common financial reporting language. The International Organization of Securities Commissions and the International Accounting Standards Committee have already set a work schedule for making acceptable international accounting standards (IASs) acceptable for cross-border offerings and listings. However, many companies, such as those based in Singapore, are resisting the IASs because they may prove to disadvantageous for them. For now, the costs of international harmonization are greater than the benefits as far as Singapore is concerned.

Standardization, International aspects, Singapore

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