To write up this essay I have researched various accounting web sites. I have also studied tax-effect accounting thoroughly in various textbooks, articles and journals.

In my research I have found that there are significant differences between the conceptual basis of tax-effect accounting adopted in the revised and superseded Standards. Some of the major differences addressed in this essay are the methodology used, the objectives, the focus, the terminology, the measurement and the recognition criteria.

The tax-effect time bomb has been ticking away since December 1999 when the Australian Accounting Standards Board (AASB) made the standard that has thrown out an old income statement approach of tax effect accounting and replaced it with what is known as balance sheet method. Some ways that organizations can confront this change is by education, technical measures and under special circumstances, understand everyday transactions. These are also discussed in the essay.

Organisations have to get an understanding of how the accounting standard works and what impact it has on the way their financial statements will look. Company boards will also want to understand why additional liabilities are appearing on the statement of financial performance.

They must apply the standard the way it was meant to be applied and that means that they have to go through with 1020, calculate the tax bases, calculate the amounts required for they deferred tax assets, compare them to opening balances and work out the journals.

The change in approach from the profit and loss based tax-effect accounting method to a statement of financial position approach is a significant one has attracted much debate. Despite these debates, the new tax effect accounting will be operative from 30th of June 2003.

Some topics in this essay:
Ernst Young's, Superseded Standard, Income Taxes”, Andersen KPMG, Income Taxes’, Urgent Issues, Revised Standard, Tax-Effect Accounting, , Profit Loss, deferred tax, income tax, effect accounting, tax effect accounting, revised standard, tax effect, balance sheet, tax-effect accounting, tax expense, statement financial, accounting standards, deferred tax assets, future tax consequences, comprehensive balance sheet, future income tax,