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IFRS Foundations Hits a Reporting Snag of its Own

The IFRS Foundation may have slipped up in its tax dealings in England, accord

The International Financial Reporting Standards Foundation could be in some hot water in England over a potentially embarrassing oversight in its financial reports, according to the Hindu Business Line.

The source reported that the IFRS Foundation, which oversees the International Accounting Standards Board, marked down a £460,000 provision made for a tax settlement with Britain's HM Revenue and Customs in its most recent annual report. The money was marked as a liability stemming from an ongoing tax investigation. The source could not specify the nature of the investigation, but quoted one expert who is familiar with the situation.

“It could be about people who are considered by the HMRC to be subject to Pay as You Earn taxation,” Richard Murphy, director of UK-based Tax Research and an anti-tax avoidance campaigner, told the source. “It could be about a dispute over the taxation of benefits in kind, things considered a business expense but taxable according to HMRC.”

Murphy pointed out that the IFRS Foundation reported the risk as an estimated liability, rather than a remote contingency liability, which suggests that the organization had been somewhat careless about covering all their risks - ironic for an agency that is dedicated to accurate reporting standards.