Other news in brief

In a recent article in Tax Matters Digest we discussed the tax issues that may arise from proposed changes to FRS 102 lease accounting. The Financial Reporting Council’s (FRC's) September 2023 update has now announced that the changes to FRS 102 lease accounting - which are still subject to amendment - will be deferred.   Specifically:

• The amendments to the standard are expected to be finalised in the first half of 2024;
• The effective date is now expected to be (at the earliest) accounting periods beginning on or after 1 January 2026; and
• Further changes "may include ... clarifying the scope of the recognition exemption for leases of low value assets".  

Based on the above, our thoughts on the tax implications are essentially unchanged. The key take-away is that any tax issues on transition are now further over the horizon.

Following the introduction of the OECD Pillar Two model rules, the International Accounting Standards Board (IASB) published amendments to the IFRS for SMEs Accounting Standard, based on the amendments to IAS 12 Income Taxes published earlier this year. The amendments firstly provide an immediate temporary relief from accounting for deferred taxes arising from the implementation of the Pillar Two rules. The second amendment clarifies that the Standard requires companies applying the Standard to disclose information that enables users of their financial statements to evaluate the nature and financial effect of income tax consequences of Pillar Two legislation.