The Belgian Accounting Standards Commission (‘CBN/CNC’) has considered whether deferred taxes on capital grants and realised capital gains can – from a Belgian GAAP perspective – be recognised in a company’s balance sheet at the discounted value of the deferred tax.
Under Belgian GAAP, deferred taxes should be recognised in a company’s balance sheet at an amount equal to the amount of tax that would be charged on the capital grant or capital gain if it was taxed in the year the gain or grant was accounted for. This valuation should, however, also take into account tax deductions, credits or exemptions in case it is expected that one of those items will decrease the tax effectively due on the capital grants or realised capital gains.
Deferred taxes on realised capital gains and/or capital grants can, according to the CBN/CNC, not be discounted as (i) it is not practicable and (ii) the possibility for discounting such deferred tax is not prescribed by the Belgian accounting legislation. Also for IFRS or US GAAP reporting, deferred taxes cannot be discounted.