FRS 102 – consolidated tax disclosures

By Tolley in association with Malcolm Greenbaum
Corporation_tax_img

The following Corporation Tax guidance note by Tolley in association with Malcolm Greenbaum provides comprehensive and up to date tax information covering:

  • FRS 102 – consolidated tax disclosures
  • Introduction
  • Consistent accounting policies
  • Elimination of unrealised profit
  • Intra-group dividends
  • Equity accounting
  • Parent company financial statements

Introduction

There are additional tax issues to consider when preparing the tax workings for consolidated financial statements, other than the fair value adjustments required when there is a business combination (see the FRS 102 – specific deferred tax issues guidance note). These issues are explained below.

Consistent accounting policies

It is possible that some subsidiaries in the group prepare individual financial statements using different accounting policies to the parent company. This is most common, but not restricted to, cases where those subsidiaries operate in foreign jurisdictions.

The financial statements of the subsidiary will need to be adjusted for these different accounting policies prior to consolidation into the parent company's financial statements, so that the accounting policies applied are consistent.

Some examples that arise in practice are different methods of inventory (stock) valuation and leases. For instance, some countries do not

More on New UK GAAP: