The Effect of IFRS Implementation on Tax

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EXECUTIVE SUMMARY

• Although the pace of the transition from GAAP to IFRS has slowed recently, convergence of the standards for U.S. companies, including the standards for accounting for income taxes, will eventually happen through the complete adoption of IFRS standards or the issuance of a series of standards that effectively conform GAAP to IFRS.
• The transition to IFRS will have an enormous impact on the calculation and reporting of income taxes for U.S. companies that are currently reporting under GAAP. Both CPAs with clients who will be subject to the new IFRS standards and the tax departments of these clients should be planning now for the transition.
• The IASB has issued an exposure draft of a new standard on income tax to replace IAS 12, the IFRS equivalent of FAS 109, that reduces the differences between IFRS and GAAP in accounting for income taxes. The draft includes changes to the definition of tax basis, the definition and treatment of temporary differences, the treatment of uncertain positions, and the recognition and calculation of deferred tax amounts.

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Until recently, the movement toward adoption of international financial reporting standards (IFRS) as a single set of globally accepted accounting standards seemed to be moving at a relentless pace. However, in her confirmation hearings, newly appointed Securities and Exchange Commission chair Mary Schapiro signaled that she would slow down the IFRS road map proposed by the SEC last November. “I will take a big deep breath and look at this entire area again carefully and will not necessarily feel bound by the existing road map that’s out for comment,” she said.¹ She cited such reasons as the ailing economy and costs of implementation for her concern about the rapid pace of U.S. IFRS adoption.

Despite this development, a case can be made that complete adoption may not be necessary to bring about convergence of U.S. generally accepted accounting principles (GAAP) with IFRS. For example, the Financial Accounting Standards Board (FASB) has designed most of the standards it has issued in the past four years to bring U.S. GAAP standards and international GAAP standards (IFRS) closer together. A good example of this is Financial Accounting Statement (FAS) No. 141(R), Business Combinations (rev. 2007), and FAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (2007), for minority interests. In these cases, FASB issued standards that were consistent with the international standards. The International Accounting Standards Board (IASB) is doing the same thing as FASB: It is issuing standards to bring it closer to a U.S. GAAP alternative over time where U.S. GAAP is deemed preferable to IFRS. This convergence process has been going on for years.

Income tax is an area in which the IASB and FASB have worked for convergence. The IASB’s income tax project was originally a joint project with FASB, undertaken as part of the IASB’s and FASB’s short-term convergence project aimed at eliminating differences between U.S. GAAP and IFRS. Accounting for income taxes seemed an ideal topic for convergence. International Accounting Standard (IAS) No. 12, Income Taxes, is based on the temporary difference approach developed by FASB and used in FAS No. 109, Accounting for Income Taxes.² However, the project proceeded slowly, and FASB announced last year that it had “suspended indefinitely” its deliberations on the income tax project. On March 31, 2009, the IASB published an exposure draft of a new standard on income tax intended to replace IAS 12.³ The IASB solicited comments on the exposure draft that should have been received by July 31, 2009. FASB indicated that it would seek input from U.S. constituents by issuing an invitation to comment on the IASB exposure draft. It would then decide whether to undertake a project that would eliminate differences in accounting for income taxes by adopting the proposed new standard.

The primary goal of this article is to explain how the implementation of IFRS (whether through convergence or adoption) would affect tax. The first section focuses on two key areas that companies should address to prepare for IFRS. First, resources will be needed to help clients get up to speed on the new accounting standards. In addition, accounting systems may need to be changed. The second section focuses on the exposure draft to replace IAS 12 and reviews how this statement is largely in line with FAS 109 and U.S. GAAP. The final section examines the effect of IFRS adoption on tax compliance for U.S. multinationals.

Working with the Client

Tax practitioners need to actively work to anticipate the specific changes that will affect individual clients and should be involved with clients as much as possible as they begin making changes to conform to IFRS.⁴ The first step is to find out if the client’s company has assembled a team to deal with the transition to IFRS. If it has, it is important that someone with a tax viewpoint be part of this team. Tax directors should seek out these groups and join as soon as possible. IFRS affords companies a significant amount of flexibility and options on how to account for certain transactions. A company should make the decisions on the elections and treatment options under IFRS only after considering the potential tax implications.⁵

Next, a practitioner should assess the client’s employees’ skill sets. Identify those who have experience and knowledge of the subject. Employees should be prepared to deal with the new issues and situations that will arise with IFRS. It is just as important to educate the client’s staff as it is to educate the practitioner’s own tax staff. This will aid in the delivery of data and information when it comes time to prepare the tax return. Once the basic accounting policies and procedures are understood, practitioners and directors should start raising a number of important tax questions, such as:

• Is the new financial reporting standard a permissible tax accounting method?
• Is the new book method preferable for tax reporting purposes?
• Is it necessary to file changes in methods of accounting?
• Will there be modifications in the computation of permanent and temporary differences?
• How will reporting in accordance with IFRS affect the computation of taxable earnings and profits, foreign source income, and investments in subsidiaries?

In addition, practitioners and directors should address the changes that IFRS will have on the company’s effective tax rate. This is the ratio of income tax to pretax income. IFRS could potentially change the numerator and the denominator of this equation, which in turn could have either a positive or negative influence on the effective tax rate. This change in effective tax rate could have a trickle-down effect when it comes to the finance department as it evaluates the after-tax benefit of potential new projects.⁶

Accounting Systems

To reflect the changes brought about by IFRS, companies could modify their accounting and reporting systems. Of immediate concern is the ability to capture parallel information on a U.S. GAAP and IFRS basis, especially for the year(s) immediately prior to adoption. Advance preparation and an adequate amount of lead time are paramount for this transition. Because reporting systems generate the tax data that preparers use to generate tax returns, much is riding on the completeness and sophistication of these systems.

Before diving into the reconstruction process, companies should take a step back and remember that this is the perfect opportunity to address and rethink how they calculate and report data. They should first perform an overall assessment of the system and then use this transition as a chance to correct inefficiencies.⁷

Another area of opportunity that the change permits is an increase in automated processes. Clients should be talking with data suppliers about their tax requirements to produce the data they provide in a more automated fashion. Not only will this increase efficiency, it will also greatly reduce human calculation and reporting errors.⁸

Input from the tax department is necessary in the renovation of accounting systems. What transactions have a tax effect with IFRS now? How will the preparer of the information be able to determine taxable versus nontaxable events with the new system? These issues must not be left to chance. Tax practitioners need to be directly involved with programmers and developers as they modify accounting systems to reflect IFRS.

Finally, the system needs several test runs. Clients should prepare financials with the new system, and practitioners must take the time to help clients become familiar with the changes. Clients’ tax return preparation should be done with a trial run using the new system. By making these test runs during the slow season, tax preparers can work out a significant number of problems before it is time to prepare the actual returns.

Accounting for Income Taxes:

Exposure Draft to Replace IAS 12

According to the IASB, the exposure draft’s objective is to clarify and improve IAS 12 and to reduce the differences between IAS 12 and the U.S. standard, FAS 109, and related U.S. GAAP. The exposure draft for IAS 12 represents a large step forward in convergence with FAS 109 and U.S. GAAP.

Definition of Tax Basis and Temporary Difference

IAS 12 currently requires the tax base of an asset or liability to reflect the manner in which the entity expects to recover the asset (or settle the liability). This effectively makes deferred tax a function of management intent, which the IASB has tried to avoid in other areas of financial reporting. The exposure draft proposes replacing the term “tax base” with “tax basis,” defined as “the measurement, under applicable substantively enacted tax law, of an asset, liability or other item.”⁹ The tax basis of both an asset and a liability is determined by the tax consequences of selling it for its carrying amount at the reporting date.

At present, a temporary difference is simply the difference between the carrying amount of an item and its tax base. The exposure draft redefines a temporary difference as the difference between the carrying amount of an item and its tax basis that the entity expects will affect taxable profit when the carrying amount of the related asset or liability is recovered or settled (or, in the case of items other than assets or liabilities, will affect taxable profit in the future).¹⁰ The other type of temporary difference is differences between the carrying amount of investments in a subsidiary or joint venture and the tax basis of those investments in the tax jurisdiction of the parent or investor.¹¹ In effect, this means that the IASB still relies on management intent insofar as the measurement of deferred tax depends on the entity’s expectations.

Exceptions to the Temporary Difference Approach

Currently IAS 12 denies the recognition of deferred tax on most temporary differences that arise from the initial recognition of assets and liabilities. The IASB adopted this approach as a practical solution to what it concluded were inappropriate accounting consequences of temporary differences. The exposure draft proposes eliminating that exception. Therefore, deferred tax would be recognized on all temporary differences whenever they arise. The only exception is with the initial recognition of goodwill, where the deferred tax liability would not be recognized.¹²

The exposure draft also requires that any temporary difference arising on the initial recognition of an asset or liability be split into:

• The asset or liability, without any entity- specific tax effects; and
• The entity-specific tax effects generally: The extent to which the tax treatment of an item in the hands of the entity places the entity in a better or worse position than the taxpayer as a whole.

The first amount becomes the carrying amount of the asset or liability. The entity recognizes deferred tax as a temporary difference from this carrying amount. Interestingly, the practical impact of this approach maintains the former initial recognition exception. Specifically, where an asset or liability is recognized other than in a business combination or in a transaction that affects comprehensive income, equity, or taxable profit, the entity also recognizes a premium or allowance (the difference between the amount paid for an asset, or received for a liability, and its carrying amount, together with any associated deferred tax asset or liability). As a result, the entity offsets the premium or allowance against the deferred tax balance.

Allocation of Tax to Components of Comprehensive Income or Equity

The exposure draft requires an entity to recognize any change to a tax asset or liability relating to an item accounted for in an earlier period in profit or loss, without any backward tracing. IFRS currently states that current and deferred tax should be charged or credited in other comprehensive income (OCI) or directly in equity if the tax relates to items that were credited or charged, whether in the current or previous period, in OCI, or directly in equity. Backward tracing refers to the current treatment under IAS 12 where subsequent changes to those amounts are also allocated to OCI or equity as applicable. For example, an available-for-sale security had $100 of unrealized appreciation and was reported in other comprehensive income (a separate component of shareholders’ equity) net of tax (assuming a 40% rate) as a $60 increase in year 1. Assuming no changes in market value of the security and a tax rate change to 45%, backward tracing would result in the $5 incremental tax effect being allocated to comprehensive income in year 2. The exposure draft maintains the exception for backward tracing for share-based payment transactions. For example, any tax deduction received in excess of the cumulative expense for an award is accounted for in equity.¹³

Uncertain Tax Positions

The exposure draft indicates that entities measure uncertain tax positions on an expected outcome basis (e.g., as the probability-weighted average of expected outcomes).¹⁴ Uncertain tax positions arise when there is an uncertainty as to the meaning of the law, the application of the law to a particular transaction, or both. Practice in this area has lacked uniformity because IAS 12 does not explicitly address the recognition and measurement of uncertain tax positions.

The exposure draft also requires that entities disclose information about the major sources of uncertainties estimation relating to tax effects to help users assess the possible financial effects of the use of estimates for both uncertainty and timing. ¹⁵ An example of uncertainty is the effect of an unresolved dispute with tax authorities. The exposure draft specifically requires:

• A description of the uncertainty; and
• An indication of its possible financial effects on amounts recognized for taxes and the timing of those effects.

The increased disclosure requirements may be a source of significant controversy due to the sensitive nature of these items.

FASB guidance for uncertain tax positions uses a two-step process. The first step is determining whether the recognition of an uncertain tax position is appropriate. If so, the second step is accurately measuring that position. The tax benefit of an uncertain tax position can be recognized only if it is more likely than not that the tax position is sustainable based on its technical merits. The tax position is then measured by using a cumulative probability model: the largest amount of tax benefit that is more than 50% likely to be realized on ultimate settlement.

Example: Enterprise E takes a tax deduction that results in a tax benefit of $100. The position is just barely more likely than not. In other words, it is only 50.1% likely based on the technical merits that E will prevail in litigation with the taxing authority. After E determines that the position has met the recognition threshold, it estimates the distribution of potential outcomes as shown in Exhibit 1 on p. 845 (after considering, for example, prior history and the enterprise’s and the taxing authority’s settlement postures).¹⁶

Exhibit 1: Distribution of potential outcomes

Amount of tax position management believes will be sustained	Percentage likelihood tax position will be sustained	Cumulative probability tax position will be sustained position will be sustained
$100	15%	15%
80	20	35
60	20	55
40	30	85
20	15	100

Thus, in this example, FASB stipulates that $60 (with a cumulative probability of 55%) is the largest amount that is more than 50% likely of being ultimately realized.¹⁷ The measurement of the tax liability under IFRS is likely to differ from GAAP requirements because IFRS’s general approach to liabilities is a probability-weighted method. Using the data from Exhibit 1, an expected value or probability- weighted method would indicate that a tax benefit of $85 could be recognized, as in Exhibit 2.

Exhibit 2: Distribution of probability-weighted potential outcomes

Amount of tax position management believes will be sustained	Percentage likelihood tax position will be sustained	Distribution of probability-weighted potential outcomes	Cumulative probability-weighted amount of tax benefit
$100	15%	15%	$15
80	20	16	31
60	20	12	43
40	30	12	55
20	15	30	85

Presentation

The exposure draft requires entities to offset the current amount of deferred tax assets against the current amount of deferred tax liabilities and the noncurrent amount of deferred tax assets against the noncurrent amount of deferred tax liabilities. ¹⁸ This offset should occur when an entity has a legally enforceable right to set off current tax assets against current tax liabilities, and the deferred tax assets and deferred tax liabilities relate to taxes levied by the same tax authority. As such, it now follows U.S. GAAP, where an entity recognizes the amount in full but then reduces it by the valuation allowance to the amount that the entity expects to recover. U.S. GAAP also stipulates that the classification of deferred tax assets and deferred tax liabilities must follow the classification of the related nontax asset or liability for financial reporting (as either current or noncurrent). If a deferred tax asset is not associated with an underlying asset or liability, it is classified based on the anticipated reversal periods. The entity must allocate any valuation allowances between current and noncurrent deferred tax assets for a tax jurisdiction on a prorata basis under U.S. GAAP.

Transitional and First-Time Adoption Provisions

0According to the exposure draft, an entity must apply the new requirements for the allocation of tax to components of profit or loss, OCI, or equity prospectively from the date of the first opening statement of financial position.¹⁹ In places where deferred tax has not been recognized on items due to the initial recognition exception, the new requirements are applied as if the items concerned had been acquired for their carrying amounts outside a business combination at the date of the first opening statement of financial position. Finally, entities transitioning to IFRS are also generally required to apply the proposed new standard retrospectively. However, the entity must apply the new requirements for the allocation of tax to components of profit or loss, OCI, or equity prospectively from the date of transition to IFRS.

Recognition of Deferred Tax Assets

Under U.S. GAAP, deferred taxes are recognized in full but are then reduced by a valuation allowance if it is considered more likely than not that some portion of the deferred taxes will not be realized. The exposure draft includes a proposal to recognize deferred tax assets in full, less (if applicable) a valuation allowance to reduce the net carrying amount to the highest amount that is more likely than not to be realizable against taxable profit. This approach replaces the existing single-step recognition of the portion of a deferred tax asset for which realization is probable.²⁰

Calculation of Deferred Asset or Liability

Deferred tax assets are future taxes that an entity would receive because of deductible temporary differences and the tax effect of recognizing unused tax loss carryforwards and unused tax credits. Deferred tax liabilities are those taxes that are going to be payable in the future as a result of taxable temporary differences. ²¹ These amounts will vary depending on which tax rate is used. The exposure draft clarifies that “substantively enacted” means that future events required by the enactment process historically have not affected the outcome and are unlikely to do so.²²

Use of Different Tax Rates on Distributed or Undistributed Earnings

Certain jurisdictions tax an entity’s taxable income at different rates, depending on whether the entity distributes the income to owners or retains it. Other jurisdictions give the entity a deduction from taxable income for dividends paid to owners. In these situations, the IASB decided to require the entity to use the distributed rate to measure tax assets or liabilities if the entity expects to distribute income to owners and has the ability to do so. In all other cases, entities are required to use the undistributed rate. The exposure draft changes the requirements relating to the tax effects of distributions to shareholders. Under new rules, the entity would measure current and deferred tax assets and liabilities using the rate expected to apply when it realizes or settles the tax asset or liability, including the effect of its expectations of future distributions. This would replace the requirement in IAS 12 to use the undistributed rate.²³

IFRS Carries Global Tax Implications

Budgeting and Reporting

The shift to IFRS would affect the full array of corporate processes. The multinational giants that the SEC announced it would permit to start reporting using IFRS in two years’ time would also face significant tax ramifications in each country in which they do business. Accounting firms are advising tax departments to assess both the benefits and the costs of the transition while managing the attendant risks inherent in the differences between IFRS and tax reporting rules. As more countries implement IFRS, it is highly probable that there will be an immediate impact on certain aspects of foreign tax reporting. Moreover, there will be a corresponding effect on the overall effective tax rate for those U.S. multinationals that rely on reducing foreign taxes to maintain their effective tax rate. Companies operating in countries requiring or moving toward the use of IFRS should be aware of possible changes in a number of important areas.

Earnings and Profits

Earnings and profits (E&P) play a key role in international taxation, including the foreign tax credit (FTC). Regs. Sec. 1.964-1 specifies three steps to compute a foreign corporation’s E&P. First, the corporation should prepare a local currency earnings statement for the year. Second, it should make necessary accounting adjustments to conform the foreign profit and loss (P&L) statement to GAAP. Third, the corporation should make necessary adjustments to conform the P&L statement to U.S. tax accounting standards. If IFRS were implemented in the United States, steps two and three would be altered to reflect principlesbased financial statements rather than GAAP. Therefore, the implementation of IFRS could potentially have a significant impact on the size of E&P from foreign subsidiaries.

Given the important role E&P plays in numerous international tax provisions, IFRS implementation could affect several areas.²⁴ For example, a foreign corporation’s E&P is most frequently associated with the foreign tax credit (Secs. 902 and 960) and subpart F income (Secs. 951(a) (1)(A) and 952(c)). E&P also applies in assessing the effects on gain from the sale of a controlled foreign corporation’s:

• CFC stock; ²⁵
• Investments in U.S. property as dividends; ²⁶
• Inbound or foreign- to- foreign reorganizations; ²⁷
• Interest and other expense allocations among classes of income (e.g., foreign versus U.S. source income); ²⁸ and
• A deemed asset purchase election on a qualified purchase of a foreign corporation’s stock.²⁹

Equity

FASB proposed a narrow definition of equity that would limit the ability to classify certain financial instruments as equity; the definition is still under discussion. For countries that use IFRS as the basis for statutory reporting, changes to the characterization of an instrument from equity to debt may trigger interest expense limitation rules. A change in the definition of equity arising from a change in accounting standards may also unexpectedly eliminate the tax benefits of hybrid instruments because the income may be treated as interest rather than a dividend. IFRS will also cause certain legal instruments, such as those that can be converted from debt to equity, to be bifurcated between their equity and debt elements. Under GAAP, however, such an instrument is reported as a liability.³⁰

Transfer Pricing

Wider adoption of IFRS could have both positive and negative effects on the development and implementation of transfer pricing policies. In one respect, implementing transfer pricing policies may eventually become easier as companies develop the documentation and necessary expertise under IFRS. In the beginning, however, certain tax planning structures such as transfer pricing agreements and cost allocations across jurisdictions will be affected. These calculations are typically expressed as a percentage of financial accounting measures such as profit, margin, etc., and IFRS will affect those measures.

Balance sheet allocations required under IFRS will also have transfer pricing implications. For example, under both SFAS 141 and IFRS 3, all excess value over book value acquired may no longer be simply allocated to goodwill without further investigation. Instead, all intangible assets must be separately recognized. These allocations have significant tax implications. For example, transfer pricing policies could be used by tax authorities to question transfer pricing allocations performed for tax purposes.³¹ In the same way, a taxable gain may be determined on the sale of a subsidiary to which a low value has been allocated. Conversely, where an excessively high value is allocated to a subsidiary, it is possible that the cashflow generated by the subsidiary will not support the allocated value. For these reasons, the allocation of intangible assets and goodwill for accounting purposes should also take tax considerations into account.³²

Conclusion

More than 12,000 companies in almost 100 nations have adopted IFRS, including listed companies in the European Union. Other countries, including Canada and India, are expected to transition to IFRS by 2011. Japan and Mexico have plans to converge their national standards with IFRS. The number of countries requiring or accepting IFRS could grow to 150 in the next few years.

Many people believe that SEC acceptance of IFRS for public companies in the United States is inevitable. For many years the SEC has been expressing its support for a core set of accounting standards that could serve as a framework for financial reporting in cross-border offerings. In recent years it has supported FASB and IASB efforts to develop a common set of high-quality, global standards. While there are differences, the IASB and FASB are working to bring the two standards closer together. One example is the exposure draft on income tax recently released by the IASB. As originally adopted, IAS 12 had a significant number of differences from U.S. GAAP. The recently issued draft standard eliminates a great many of these differences.

After these changes, it seems that taxpaying entities would not experience the same degree of upheaval if FASB were to adopt the new IFRS standard for income tax as a replacement for FAS 109. However, entities should still assess the effect of these amendments across the entire spectrum of their tax function. These changes would still affect tax planning, tax provisions, tax compliance, and tax controversy. Perhaps the largest impact in terms of expanded data gathering—on documentation and support—may stem from the requirements in the exposure draft for uncertain tax positions. These requirements will affect entities as they interact with both domestic and foreign tax authorities. The U.S. move toward international accounting rules may have slowed momentarily, but some major corporations report that they have not paused in their preparation for the eventual shift in the standards for financial reporting.³³ Tax departments across the United States should investigate and prepare for the possible implementation of IFRS.

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EditorNotes

John McGowan is a professor of accounting in the John Cook School of Business at Saint Louis University, St. Louis, MO. Matt Wertheimer is an associate at KPMG, LLP, in St. Louis, MO. For more information about this article, contact Dr. McGowan at mcgowanjr@slu.edu.

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¹ Lamoreaux, “SEC Nominee Pledges to Revitalize Enforcement, Has Concerns About IFRS,” JournalofAccountancy.com (January 16, 2009).

² Note that FASB has codified its accounting standards; FAS 109 is now mostly codified in Accounting Standards Codification Subtopic 740-10.

³ IASB, Exposure Draft ED/2009/2, Income Tax (March 2009).

⁴ See Whitehouse, “How the Tax Executives Should Approach IFRS,” Compliance Week (July 22, 2008), www.complianceweek.com/article/4309.

⁵ See id.

⁶ See Ernst & Young, “IFRS: 10 Reasons Why Tax Must Be Involved” (2009).

⁷ See Deloitte, “International Financial Reporting Standards for U.S. Companies” (2007).

⁸ See Ernst & Young, “IFRS: 10 Reasons Why Tax Must Be Involved.”

⁹ IASB, Exposure Draft, Appendix A, p. 34.

¹⁰ IASB, Exposure Draft, ¶18, p. 21, and Appendix A, p. 35.

¹¹ IASB, Exposure Draft, ¶¶B1–B9, pp. 36–37.

¹² IASB, Exposure Draft, ¶21, p. 22.

¹³ IASB, Exposure Draft, ¶B43, p. 49.

¹⁴ IASB, Exposure Draft, ¶26, p. 23.

¹⁵ IASB, Exposure Draft, ¶49, p. 32.

¹⁶ This example is taken from the FASB Project Updates, Uncertain Tax Positions.

¹⁷ However, the statistical mode, or single best estimate, is $40, which would have been recognized in the financial statements based on the board’s previous decision. See FASB Project Updates, Uncertain Tax Positions.

¹⁸ IASB, Exposure Draft, ¶¶ 36–37, p. 28.

¹⁹ IASB, Exposure Draft, ¶¶ 50–52, p. 33.

²⁰ IASB, Exposure Draft, ¶23, p. 22.

²¹ IASB, Exposure Draft, Appendix A, p. 34.

²² IASB, Exposure Draft, ¶B26, p. 43.

²³ IASB, Exposure Draft, ¶25, p. 23.

²⁴ See Lau and Soltis, “A Guide to Foreign Corporation E&P (Part I),” 35 The Tax Adviser 290 (May 2004).

²⁵ Sec. 1248.

²⁶ Sec. 956.

²⁷ Sec. 367(b).²⁸ Sec. 864(e)(4).

²⁹ Sec. 338.

³⁰ See Deloitte, “Global Tax Implications of International Financial Reporting Standards” (2008).

³¹ See Bjørn, Lund, and Tseng, “Financial Reporting May Create Transfer-Pricing Issues,” Int’l Tax Rev. (July-August 2007, transfer pricing supp.)

³² Id. at 66.

³³ See Whitehouse, “Companies Dive into IFRS to Prep for Eventual Adoption,” Compliance Week (June 4, 2009).