Briefly describe the four major differences between IFRS and GAAP in the measurement procedures used in accounting for deferred income taxes.
What will be an ideal response?
The four differences between IFRS and GAAP in accounting for deferred income taxes are:??
| 1. | The IFRS threshold for recognition of deferred tax assets is "probable" and is not defined, while the GAAP threshold is "more likely than not" and is defined. |
| 2. | The IFRS upward revaluation of assets to market leads to recognition of deferred tax assets relating to those unrealized gains. No comparable procedure exists in GAAP. |
| 3. | Under IFRS, in addition to the future tax rates being a factor in the measurement of deferred tax assets (as they are under GAAP), the local tax laws regarding how the deferred tax assets may be settled or recovered are also considered in the measurement. |
| 4. | IFRS provide no specific guidance on the recognition of deferred tax liabilities related to uncertain tax positions. GAAP provide such guidance. |
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