Abstract

The adoption of IFRS was made mandatory for all listed companies in Korea effective from 2011, and this adoption has created a paradigm shift in corporate tax accounting. As the accounting rules used for book keeping of income tax accounting were replaced by IFRS, a change in research trend for tax accounting related research is anticipated. This article seeks to review financial accounting- and tax accounting-related research trends in Korea and the US. Further, the effects of adopting IFRS on research trends, along with suggestion for future research will be provided. Fair value accounting, the core of IFRS, is likely to increase the gap between the financial accounting and tax accounting, which calls for further research on adjustment of the gap. In 2010, in order to minimize any conflict that may arise from the adoption of IFRS, various measures, such as discontinuance of LIFO and accelerated depreciation have been implemented. Such tax reform measures should be undertaken whenever necessary in the future. Because of the nature of IFRS, the gap between financial accounting and tax accounting tends to widen. Thus, research should be conducted to seek ways to minimize tax burden, and effectively operate income tax allocation with the use of two-book system for financial accounting and tax accounting. Further, any income tax allocation problem arising from the adoption of IFRS, as well as a remedy for the problem should be dealt with. The effects of implementing IFRS on the calculation of income tax expense and effective corporate tax rate, and ways to create a smooth alignment between IFRS and relevant laws and regulations such as tax law, business law, and stock exchange law should be studied in depth. As globalization of economy gets accelerated, other issues related to IFRS, such as transfer pricing taxation and international taxation should be actively researched. Furthermore, for the implementation of FTA, issues related to certificate of origin should be addressed in further research.

Keywords

• IFRS
• Financial Accounting
• Tax Accounting
• Corporate Income Tax Accounting
• Income Tax Allocation

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