Published on 01 Apr 11
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
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.
Davide Costanzo CTA
Davide is a Manager in the Tax and Business Services Division of
Moore Stephens Perth. With over 8 years of professional
experience, Davide is predominantly involved in the area of tax
consulting and tax compliance for more complex and larger client
groups, including listed public companies. Current at 01 December 2011
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