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You have probably been inundated with Pillar 2 information but I wanted to share an insight into an area which could impact June year end or December half year reporting:

UK Timings

The particular issue is that, for example in the UK the Pillar Two legislation is expected to be substantively enacted in June or July 2023 whereas the IAS 12 amendment, which provides a temporary exception to accounting for deferred tax in relation to Pillar Two, was officially issued on the 23rd May but cannot be applied immediately in the UK  as it has to be endorsed by the UK Endorsement Board. It is likely to be endorsed in the UK (an endorsement by the UK Endorsement Board is required before IFRS accounting standards or changes to those standards can be used for UK reporting) in mid July so you could have a small period where the UK rules are substantively enacted without the IAS 12 amendment.

International considerations

We understand that a number of other territories also endorse IFRS standards before they can be used although it's not clear to us at this stage the specific timing of endorsements. All of the dates referred to are approximate and you may have other territories outside of the UK to consider.

Go forward

Companies may therefore need to determine what their accounting policy is in relation to Pillar Two and document appropriately for June reporting requirements where the Pillar Two rules are enacted in any territories but the IAS 12 amendment is not endorsed at that point. The In brief discusses this point and suggests some solutions, but your usual PwC contact would be happy to discuss. 

In Brief - Global implementation of Pillar Two: proposed amendments to IAS 12 – endorsement and enactment timing