Tax assessments can often lead to adjustments in financial statements, but do they always require a restatement of prior-period financials? The answer depends on the nature of the adjustment.
If the tax assessment arises due to an error in prior financials—such as misapplication of tax laws or omission of taxable income—a restatement is required. Prior-period financials must be adjusted, with the effect reflected in the opening balance of retained earnings.
When additional tax results from a new interpretation by the tax authority, a dispute resolution, or new facts, it is treated as a change in estimate. In this case, the adjustment is recorded prospectively in the period when it becomes known, without restating prior financials.

Uncertain Tax Positions (IFRIC 23 & IAS 12)
IFRIC 23 provides guidance on accounting for uncertainties in income tax treatments under IAS 12 – Income Taxes. It helps entities determine how uncertain tax positions should be recognized and measured in financial statements.
(a)At the time of initial recognition if uncertainty exists.
(b)In subsequent reporting periods if new information emerges that affects the probability assessment