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3.7 Presentation of taxes collected from customers
Publication date: 30 Nov 2020
us IFRS & US GAAP guide
Entities often collect amounts from customers that must be remitted to a governmental agency. The revenue standards include a general principle that requires management to assess each type of tax, on a jurisdiction-by-jurisdiction basis, to conclude whether to net these amounts against revenue or to recognize them as an operating expense.
US GAAP | IFRS |
ASC 606 allows entities to make an accounting policy election to present all taxes collected from customers on a net basis.
| IFRS 15 does not provide this election. IFRS reporters (and US GAAP reporters that do not make this election) must evaluate each type of tax on a jurisdiction-by-jurisdiction basis to determine which amounts to exclude from revenue (as amounts collected on behalf of third parties) and which amounts to include.
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