The section of the new UK GAAP – FRS 102 – covering deferred tax has been one of the standard's most hotly disputed parts.

To put it in context, the IFRS for SMEs, on which FRS 102 is based, took the bold step of basing its tax section on a new model that the International Accounting Standards Board (IASB) was putting forward to replace IAS 12, Income Taxes.

This model had some conceptual problems as well as certain requirements which could not practically be applied, and by the time the Financial Reporting Council (FRC) came to work on FRS 102, these problems had become apparent and the IASB's project to revise IAS 12 on this basis had been set aside.