Accounting for tax - current tax - FRS 16
FRS 16 - in force for year ends after 22 March 2000
FRS 16, Current tax, is a short Standard (now in force) which sets out accounting rules and disclosure requirements relating to the corporation tax charge, and replaces SSAP 8. The principal requirements are:
- tax relating to any items recognised in the Statement of Recognised Gains and Losses (and hence not in the Profit and Loss Account) should similarly be shown in the STRGL, and not in the P & L;
- dividend and interest payments and receipts should be shown gross of withholding tax but net of any tax credits that are not payable wholly on behalf of the recipient;
- except as regards dividends and interest, income and expenses may not be adjusted to reflect any notional tax effect.
These requirements are not controversial.
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