If your business is a reporting entity, we can help you face a number of unique challenges when preparing tax effect accounting to comply with AASB 112.

In the past the Australian Securities and Investments Commission (“ASIC”) has highlighted tax effect accounting as one of its focus areas in its compliance and review activities.

If you are an entity that is a Reporting Entity under the A-IFRS Accounting Standards you are required to comply with “AASB 112 Income Taxes” and UIG 1052, both of which have very specific and complex requirements on how an entity accounts for its income taxes.

What are the challenges

If your business is a reporting entity, it faces a number of unique challenges when preparing tax effect accounting to comply with AASB 112. Including:

  • The auditor of your business is forbidden from providing you with this service. The provision of calculations and journal entries would contravene “APES 110 Code of Ethics for Professional Accountants” and auditor independence requirements.
  • Tax effect accounting is where two complex areas meet – Australian tax law and A-IFRS accounting standards – thereby creating additional complexity for businesses. In today’s environment accounting staff often specialise in only one of these areas and require additional support on tax effect accounting.
  • Tax effect accounting is a very narrow discipline so the amount of time and funds you are required to invest in order to comply with AASB 112 is disproportionate relative to the return.
  • Specialist software in this area is expensive to acquire and renew. To operate them, a significant amount of training time is required from your finance team.

How we help

We offer a specialised service designed to tackle the above challenges. Our team works closely with your business to ensure it receives everything required to meet the financial reporting requirements. Our offering provides the following benefits:

  • Personalised face-to-face service to understand your business and tax affairs.
  • Provision of a full set of workpapers to substantiate the balances and liaison with your auditors to answer their queries
  • If required, we can work with your existing accountant and fill any “service gaps” you are currently experiencing
  • Our services will be conducted under a fixed-price engagement
  • Cost savings: No longer a need for expensive specialist software or staff training workshops 
  • Your audit fees should fall to reflect smoother, more efficient audit procedures around tax balances 
  • Synergies in year-end tax return costs arising from our clear and detailed workpapers
  • Allows your finance staff to focus on the areas that matter to your company's performance 
  • Having accurate, reliable tax balances on a timely basis, not just after an audit. This will facilitate decision-making throughout the year
  • Reduce the number and quantum of audit adjustments