Answer:
The accounting standard that determines how income tax is accounted for is International Accounting Standard (IAS) 12.
IAS 12 sets out the accounting treatment for income taxes, including how to account for current and deferred tax liabilities and assets, how to calculate the current and deferred tax expense or income, and how to disclose information about income taxes in the financial statements.
The standard requires companies to recognize the amount of income tax payable or recoverable in their financial statements, based on the tax rates and laws that have been enacted or substantively enacted at the end of the reporting period. It also requires companies to recognize deferred tax assets and liabilities, which arise from temporary differences between the carrying amounts of assets and liabilities in the financial statements and their tax bases.
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