Both US GAAP and IFRS base their deferred tax accounting requirements on balance sheet temporary differences measured at the tax rates expected to apply when the differences reverse. Discounting of deferred taxes is prohibited under both frameworks. Although the two frameworks share many fundamental principles, they are at times applied in different manners and there are different exceptions to the principles under each framework. This may result in differences in income tax accounting between the two frameworks. Some of the more significant differences relate to the allocation of tax expense/benefit to financial statement components (“intraperiod allocation”), income tax accounting with respect to share-based payment arrangements, and some elements of accounting for uncertain tax positions.

The relevant differences are set out below, other than those related to share-based payment arrangements, which are described in the Expense recognition—share-based payments chapter.

US GAAP:ASC 740

IFRS:

IAS 12, IAS 34, IAS 37, IFRIC 23, Standard Interpretations Committee (SIC) Interpretation 25

The following discussion captures a number of the more significant GAAP differences. It is important to note that the discussion is not inclusive of all GAAP differences in this area.