IFRS 10, IFRS 11 and the effective tax rate

Investments in entities: what’s changed?

With regard to investments in entities one important question for tax accountants to understand is: ‘How is this investment accounted for – is it consolidated equity accounted shown as a share of assets and liabilities or held as a financial asset?’

The answer to this question is relevant in order to apply IAS 12 to the calculation and presentation of any related current or deferred tax balances. For example:

• How should the tax expense or benefit be presented in the financial statements?
• Is there a temporary difference with regard to the investment and...