1 / 9

Africa’s economic growth accountability and democracy

Africa’s economic growth accountability and democracy . Tax implications of implementing IFRS . Contents. Overview of IFRS and tax Status of IFRS implementation Rwanda case study Why change Steps taken Challenges Benefits New terminologies and lines Overview of deferred tax

alva
Télécharger la présentation

Africa’s economic growth accountability and democracy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Africa’s economic growth accountability and democracy Tax implications of implementing IFRS

  2. Contents • Overview of IFRS and tax • Status of IFRS implementation • Rwanda case study • Why change • Steps taken • Challenges • Benefits • New terminologies and lines • Overview of deferred tax • Conclusion.

  3. Overview of IFRSs’ and tax Movement in deferred tax Tax expense Current tax = + Current tax – income tax in respect of profits/loss for the period (Based on local tax laws). Current tax = taxable income/loss x tax rate Taxable income/loss – Accounting profit/loss (based on IFRS/other framework) after tax adjustments provided for in the local laws. Tax authorities have keen interest on accounting profit IFRS vs tax laws Deferred tax – calculated based on provisions of IAS 12.

  4. Status of IFRS implementation

  5. Rwanda case study • Why change • Prior to full the adoption of IFRS in Rwanda, the the world bank and IMF commissioned a survey assessment of the corporate sector accounting, financial reporting, and auditing practices within Rwanda. The survey showed that • The accounting practices varied from institution to institution e.g. out of a sample of 41 entities 19 did not apply any principles or standards while 13 applied undefined local legislation or GAAP. 2. The review of the audited financial statements revealed various compliance gaps. • Steps taken XXXX • Challenges XXXX • Benefits XXXX

  6. Lessons learnt Adoption of IFRS in any country should be accompanied by A revision of tax laws to reflect new line items in IFRSs’ Sensitization of the tax authorities on the new line items in FS e.g. deferred tax Strengthening of the accounting profession in the country to avoid part application of IFRSs’ Some accountants opt leave out some standards e.g. IAS 41, Agriculture.

  7. New terminologies Deferred tax (IAS 12) Biological assets (IAS 41) Investment property (IAS 40) Fair value gains/losses (IAS 39) Pension assets (IAS 19) Actuarial gains (IAS 19) Unrealised exchange gains/losses (IAS 21)

  8. Overview of deferred tax Principle – recognise deferred tax when recovery or settlement will make tax payments higher or lower than they would otherwise be Inflow of economic benefits (cash) Asset Recovery Tax payable? Tax deductions? Outflow of economic benefits (cash) Settlement Liability Tax relief?

  9. Conclusion

More Related