KPMG- IFRS Is Coming, What Does This Mean for Tax

KPMG- IFRS Is Coming, What Does This Mean for Tax - IFRS Is...

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IFRS Is Coming, What Does This Mean for Tax? Friday, April 11, 2008 Many companies are in the early stages of considering what impact the transition to International Financial Reporting Standards (“IFRS”) from U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) will have on financial reporting; however, are they also thinking about the impact it will have on tax reporting? by Christine Newell, Minneapolis, MN, and Jay Kalis, Washington National Tax, Jay Kalis is partner-in-charge of the WNT Income Tax and Accounting Group. Christine Newell is a senior manager in Minneapolis, MN. IFRS is the accounting standard currently used in many parts of the world. Over 100 countries currently require or permit IFRS or a variation of IFRS. Many other countries, including the United States, are planning to require or permit IFRS, or are working on convergence with IFRS. As a result, IFRS seems to be the most likely approach to achieving a single set of high quality, globally accepted accounting standards. Panelists at the Securities and Exchange Commission (“SEC”) Roundtables in December generally agreed that U.S. domestic companies registered with the SEC should be required to file IFRS financial statements at some point in the future and that the SEC should establish a timeframe for implementing the requirement. The panelists included a broad spectrum of individuals from U.S. financial statement issuers to auditors, regulators, and academics. Suggestions on a specific date ranged from 2010 to 2015. Accordingly, while U.S. companies do not know the exact date of transition, it appears that IFRS is coming and may be replacing U.S. GAAP in the near future. Impact on Tax Accounting Methods Many elements in a company support the issuance of financial statements. Consequently, converting financial statements from one reporting standard to another would have broad implications beyond just financial (book) accounting. Tax accounting, as well as many other areas in the company would be affected. © 2008 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
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IFRS Is Coming, What Does This Mean for Tax? page 2 © 2008 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. It will be important for tax return preparers to understand any differences between
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This note was uploaded on 03/06/2011 for the course ACC 545 taught by Professor Cole during the Spring '09 term at University of Phoenix.

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KPMG- IFRS Is Coming, What Does This Mean for Tax - IFRS Is...

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