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IFRIC 23 is a new IFRS interpretation which clarifies the accounting treatment in relation to uncertain tax positions. It is similar but not identical to ASC 740-10 under US GAAP (commonly known as FIN 48).

IFRIC 23 places an obligation on investment managers to consider whether any of the positions held by the funds which they manage give rise to ‘uncertain tax treatment’ and whether it is ‘probable’ the treatment adopted would be accepted by a tax authority. Practically, it can require provisions to be recognised, impacting the NAV of the fund in respect of a liability which may not ultimately become payable.

This obligation is effective for accounting periods beginning on or after 1 January 2019 and applies retrospectively.

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