Miscellaneous 2011

Accounting for tax consolidation

Source: Taxation In Australia Journal Article

Published Date: 1 Apr 2011


Following the coming into force of the tax consolidation regime in 2002, the Australian Accounting Standards Board's Urgent Issues Group issued Interpretation 1052 — Tax Consolidation Accounting to provide authoritative guidance on acceptable accounting for income taxes in a tax-consolidated group. The purpose of this article is to explain the key features of Interpretation 1052 and to outline the steps taxconsolidated groups need to work through to recognise current and deferred tax balances. The article explains recognition of tax balances, the accounting process, alignment of accounting to tax consolidation core rules,
tax consolidation adjustments, and disclosure of necessary information. Examples illustrating the accounting for income tax within a tax-consolidated group are provided. The author cautions that the alignment of accounting to tax results in some interesting equity adjustments and should be avoided where possible.

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Miscellaneous 2011

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