18.104.22.168 Deferred Taxes
An entity that elects the fair value as deemed cost must recognize the related deferred taxes at transition date according to the rules in IAS 12, irrespective of whether the entity intends to sell the asset.659 Paragraph 22.214.171.124 previously explains that IFRS 1 does not waive IAS 12.
An issue arises about whether at transition date deferred taxes arising from fair value as deemed cost should affect opening retained earnings or accumulated other comprehensive income.
Another point concerns the account that a subsequent change in tax rates or tax laws will affect. Paragraph 126.96.36.199 previously deals with this issue.
According to IAS 12, measurement of deferred taxes must reflect the tax base and the tax rates applicable to the manner in which the entity expects to recover the carrying amount of the asset.662 IFRS first-time adopters must also ...