Home Deferred Deferred taxes on investments in subsidiaries to be recognized in the financial...

Deferred taxes on investments in subsidiaries to be recognized in the financial statements

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IL PUNTO / IAS

According to IFRIC, the entity must use the rate relating to the distribution of profits

Among the requests discussed by the IFRIC during the meeting of March 3 2020, one concerns the accounting treatment, in the consolidated financial statements of an entity, of deferred taxes relating to its investment in a subsidiary .
The case is as follows: – the undistributed profits of the subsidiary generate taxable temporary differences ; – the entity concluded that the conditions set out in paragraph 39 of the IAS are not applicable (Income taxes) relating to the exemption from recognizing a deferred tax liability for all taxable temporary differences relating to investments in subsidiaries, branches and associated companies and to investments in joint ventures, as a consequence of the fact that the entity expects the subsidiary …

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