IASB January 2007

The Board discussed the treatment under IAS 12 Income Taxes of an investment allowance (tax depreciation) in excess of the purchase price of an asset. The Board noted that arguments could be made for several possible treatments. The Board instructed the staff to examine whether the accounting for investment allowances and similar tax benefits could be clarified without delaying publication of the exposure draft. The Board also noted the need for a definition of investment tax credits.

The Board also tentatively decided to clarify that the tax base of an asset is determined by the amount deductible by the entity if it sold or otherwise disposed of the asset for its carrying amount at the balance sheet date.