IAS 12Chapter 8Lesson 2
Tax outside profit or loss: other comprehensive income and equity
Step 1 of 9Learning objectives
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When an item is recognised in OCI (revaluation of property, plant and equipment, for example) or directly in equity (opening adjustment after a change in policy or correction of an error, equity component of a compound instrument), the related current and deferred tax follows the same path, in the same period or later. A rate change on a difference arising in OCI therefore goes to OCI. In exceptional circumstances, a reasonable allocation is allowed. A tax revaluation goes to OCI only if it relates to an accounting revaluation in OCI.
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Learning objectives
- Determine whether the current or deferred tax on an item is recognised in profit or loss, in OCI or directly in equity.
- Account for deferred tax on a revaluation in OCI and on an adjustment in equity.
- Allocate a rate change on differences arising in OCI and apply a reasonable allocation in exceptional cases.
- Explain the treatment of a tax revaluation related to an accounting revaluation.