Abstract

When International Financial Reporting Standards(hereafter IFRS) is adopted in 2011, Important changes will be made in the financial reporting environments. As IFRS adopts fair value accounting as well as principle－based accounting, the book－tax difference will be increased further under present corporate tax law. In particular, as the size and type of intangible asset increase, related tax adjustment should be also increased. Moreover, Increasing in book－tax difference(BTD) may offer managers an opportunity to manage earnings and to avoid taxation by controlling the amount of payment. Following suggestions, we made in this paper. First, corporate taxation must allow temporary intangible asset revaluation. second, tax deduction should be admitted for the accounts of IFRS such as brand, license and customer list to decrease the expenses of BTD. third, as tax deduction may induce earnings management and tax avoidances, we propose that the differences between book and tax should be abolished or, at least,minimized. We analyzed several issues of intangible asset such as measurement, recognition, impairment,amortization and fair value estimation arising from the adoption of IFRS. Some suggestions are made regarding taxation system and local law changes to solve the pending issues.

Keywords

• IFRS
• Intangible asset
• fair value
• book－tax difference
• tax deductions allowed by book entry

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