International Financial Reporting Standards (IFRS) require that an entity presents in its financial statements both current and deferred tax liabilities and assets. Deferred tax is an accounting concept (also known as future income taxes), meaning a future tax liability or asset, resulting from temporary differences or timing differences between the accounting value of assets and liabilities and their value for tax purposes.
IFRS has never been an accountant’s favourite subject - the combination of unusual terminology and the concepts of tax can leave those trying to account for deferred tax feeling confused and frustrated. In-house accountants often struggle with the practical application of IFRS.