IAS 12 · Workpapers (Step 4 of 5)
Workpaper assignment
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IAS 12 Income Taxes — wording before IFRS 18Applicable today
Applies to annual periods beginning before January 1, 2027.
Uncertain tax treatments (IFRIC 23): Arlesque deduction
Professional file: IFRS tax closing of an international industrial group
Section 1 of 9
Objective
Section brief
- What to document
- The engagement, its scope and the working mode chosen.
- Why
- A workpaper answers one precise question: framing it avoids off-topic work.
- How
- Read the objective and the assignment, then choose the mode (guided, semi-guided, professional).
- Expected result
- You know which question the workpaper must settle, and for which reporting date.
- Your role
- Preparer of the IAS 12 workpaper
- Level
- Expert
- Estimated time
- ≈ 40 min
- Progress
- 0 / 5 steps done (review excluded)
Context
The Valdrise group (fictitious entities) manufactures industrial valves and pumps. Valdrise SA, the parent, is based in Lustrania; its subsidiaries are Corvanne SA in Cadoria (loss-making), Arlesque SA in Merovia (acquired on 1 July 20X7) and Valdrise Vescaria in Vescaria (a low-tax country); the four countries are fictitious. You are the preparer of the consolidated tax closing file at 31 December 20X7; the head of consolidation is the reviewer. The financial statements will be authorised on 4 March 20X8. The current tax of Arlesque and Valdrise Vescaria and the deferred tax movements prior to the closing have been recorded; the closing adjustments remain to be made. The tax rules, rates and amounts calculated by the advisers are case data.
Assignment
Uncertain tax treatments (transfer pricing, Arlesque deduction).
Purpose of the workpaper
For an uncertain tax treatment, determine the unit of account, assess whether acceptance by a fully informed taxation authority is probable, measure the effect of the uncertainty using the method that better predicts its resolution (most likely amount or expected value), recognise the tax adjustment and prepare the information on tax contingencies.
Questions of the file covered by this workpaper
- Measure the uncertain tax treatments.
- Conclude on the uncertain treatments and on Pillar Two.
- Record the closing entries.
Documents in the file
Open the documents to pick out the relevant information.