Heather Stewart has a great idea for improving corporate reporting on tax

In the UK context, that would mean firms reporting what percentage of their profits they have paid in tax in a given year – and why it's lower than the headline rate (eg because of mind-blowingly complex avoidance schemes involving a string of subsidiaries in tax havens).

Wow, what a great idea! Yes, we could call this idea IAS 12. No, it seems that IAS 12 is already taken. And it says the following:

IAS 12.81 requires the following disclosures:

• aggregate current and deferred tax relating to items reported directly in equity
• tax relating to each component of other comprehensive income
• explanation of the relationship between tax expense (income) and the tax that would be expected by applying the current tax rate to accounting profit or loss (this can be presented as a reconciliation of amounts of tax or a reconciliation of the rate of tax)
• changes in tax rates
• amounts and other details of deductible temporary differences, unused tax losses, and unused tax credits
• temporary differences associated with investments in subsidiaries, associates, branches, and joint ventures
• for each type of temporary difference and unused tax loss and credit, the amount of deferred tax assets or liabilities recognised in the statement of financial position and the amount of deferred tax income or expense recognised in the income statement
• tax relating to discontinued operations
• tax consequences of dividends declared after the end of the reporting period

That's right, she's only gone and recommended something that's already required under international accounting standards (and by UK accounting standards prior to that).

And, Dear Guardian, if you'd like to pay me Monbiot-style wages to train your journalists in the theory of accounting, just get in touch.

People who read this post also read:

• The importance of the 100 Group to the UK’s finances
• Responding to EFRAG on corporation tax disclosure
• From blog to Accounting Theory to pwned
• You wanted to know #3 – the origin of “true and fair”
• ACCA research paper – “The new UK GAAP: how would the numbers look?”

Filed under: Other blogs, Taxation with tags corporation tax, heather stewart, ias 12, ifrs, observer, uk gaap