The UK Endorsement Board (UKEB) has announced that it adopted amendments to the international accounting standard, IAS 12 International Tax Reform: Pillar Two Model Rules.
These changes were announced by the International Accounting Standards Board (IASB) in May. The UKEB published an adoption statement and the text of the amendments, which are the following:
- a temporary exception from having to recognize and disclose deferred taxes arising from legislation implementing OECD Pillar Two model rules;
- a requirement to disclose use of the above exception;
- a requirement to disclose current tax expense related to the Pillar Two income taxes; and
- a requirement to disclose information regarding exposure to Pillar Two income taxes arising before the legislation comes into force.
The first two points above are effective immediately and the last two apply to annual reporting periods beginning on or after 1 January 2023.
The implementation of the rules will continue to be monitored by the IASB, including on whether to remove the temporary exception or make it permanent.
The amendments will be consolidated into IAS 12 in March 2024.