Using the information in the Surfing the Standards Case 1, now assume that Multinational Corporation (Multinational) is an IFRS reporter. Required: a. Obtain and review the measurement guidance related to anticipated future tax credits in International Accounting Standard 12, “Income Taxes.” b. Review and discuss the general rules for this type of transaction using IFRS. c. Provide the necessary journal entries for 2015 and 2016 under IFRS Data from Surfing the Standards Case 1: In certain countries, the tax rate applied in a company’s tax return depends on whether the profits for the period are distributed or undistributed. Amounts are initially taxed at a higher rate, but a tax credit is received when amounts are distributed. Therefore, companies need to determine what rate (distributed versus undistributed) should be applied when measuring the amount of current and deferred taxes. Multinational Corporation (Multinational) is a U.S. company that owns and operates a consolidated subsidiary in a foreign jurisdiction, where income taxes are payable at a higher rate on undistributed profits than on distributed earnings. For the year ending December 31, 2015, Multinational’s foreign consolidated subsidiary’s taxable income was $150,000. Multinational’s foreign consolidated subsidiary also had net taxable temporary differences amounting to $50,000 for the year, thus creating the need for a deferred tax liability. The tax rate on distributed profits is 40% and the rate on undistributed profits is 50%; the difference results in a credit if profits are later distributed. As of the date of the balance sheet, no distributions have been proposed or declared. On March 31, 2016, Multinational’s foreign consolidated subsidiary distributed dividends of $75,000.