Accounting for income taxes: It's time for a comprehensive review

July 2011
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Point of view: Accounting for income taxes: It's time for a comprehensive review

At a glance

Recent changes in economic, regulatory, tax legislative, and accounting standard setting environments require a comprehensive review to reduce tax accounting complexity while improving the relevance and quality of the reporting.

Highlights

  • Income tax accounting is complex - it requires knowledge of the income tax accounting model, tax laws and regulations in all relevant jurisdictions, and their combined linkage to all other aspects of accounting.
  • The evolution of the economic, regulatory, tax legislative, and accounting standard setting environments since the existing accounting was introduced has magnified its shortcomings.
  • A comprehensive review is needed to reduce the complexity of income tax accounting while improving the relevance and quality of the reporting.