Revaluation: How Will the Tax Procedure Law (VUK) and TFRS/IFRS Treatments Be Reconciled?

Revaluation: How Will the Tax Procedure Law (VUK) and TFRS/IFRS Treatments Be Reconciled?

• The revaluation (indexation) carried out in financial statements prepared under the Tax Procedure Law (VUK) does not use methods and criteria similar to the valuation method under IFRS/TFRS (TFRS/IFRS 13). For this reason, the new asset values resulting from the revaluation in the VUK financial statements and the revaluation fund recognised in equity will not be taken into account (will be reversed) in the IFRS/TFRS financial statements.
• If the company revalues its assets in its VUK financial statements and uses this fund to increase capital (possible under the VUK Communiqué), it will continue to carry the new capital amount from the VUK accounts in its IFRS/TFRS financial statements, but will recognise the fund amount used for the capital increase as a negative reserve within equity.
• The 2% tax payable as a result of the revaluation of the asset in the VUK financial statements will continue to be presented as a tax expense in the IFRS/TFRS financial statements.
• If the fund arising from the revaluation under the method in the VUK Communiqué and recorded in equity in the VUK financial statements is transferred to another account in any way other than being added to capital, or is withdrawn from the business, that amount will be subject to income or corporate tax in the relevant period, without being linked to that period's profit. We would remind you that in such a case the deferred tax rate will also be the corporate tax rate applicable to the company, not 2%.
• We would also remind you that the deferred tax effect must be assessed in the IFRS/TFRS financial statements and that it will vary depending on which method entities use to account for their depreciable assets in their TFRS financial statements.