May 20, 2026
By: Rebeca Sequeira
Accounting and Financial Analyst - EAS LATAM
In this context, International Financial Reporting Standards, known as IFRS, constitute a common technical language for preparing comparable, consistent and useful financial statements for different users: shareholders, management, banks, investors, auditors, regulators and tax authorities.
Resolution MH-DGT-RES-0015-2026, issued by the General Directorate of Taxation, again highlights the importance of maintaining accounting prepared under solid technical principles. Although the resolution has a tax origin, its content confirms something essential from an accounting standpoint: financial information under IFRS or IFRS for SMEs is the basis on which the company’s tax information is built, analyzed and reconciled.
Development
IFRS have been adopted in Costa Rica as generally accepted accounting principles, and their application allows financial statements to reflect more appropriately the economic situation of an entity. This means recognizing assets, liabilities, income, expenses, impairment, depreciation, provisions, financial instruments and other items based on technical criteria, and not only from a tax or cash perspective.
The resolution recognizes the role of IFRS and IFRS for SMEs as a reference framework for preparing financial information. However, it also reminds companies that financial accounting and tax determination do not always coincide. For that reason, the company must have a tax reconciliation that identifies differences between accounting profit and taxable income determined under tax law.
From an accounting perspective, this is particularly relevant. Accounting should not be built only to complete tax returns. Its first objective should be to present reasonable, orderly, traceable and useful financial information for decision-making. Then, based on that information, the corresponding tax adjustments should be prepared.
Accounting areas with higher practical impact
Inventories: valuation methods, shortages, thefts, destruction, self-consumption, discounts and promotions should be supported with valid evidence and periodic reconciliations.
Property, plant and equipment: historical cost, depreciation, improvements, impairment, revaluations and fixed asset ledgers must be clearly documented because financial and tax treatment may differ.
Intangible assets: capitalization, amortization, patents, trademarks, rights and related tax credits must be reviewed because not every accounting intangible creates immediate tax deductibility.
Revenue and contracts: revenue recognition, construction contracts, progress billings and electronic invoices may require tax reconciliation, particularly in long-term contracts.
Borrowing costs: interest capitalized in connection with acquisition or improvement of assets may not be deductible until the asset is available for use or sale.
Deferred tax: temporary differences under IAS 12 or Section 29 require traceability between accounting profit, tax basis and future tax charges.
Property, plant and equipment: the most visible example
One of the most important areas is the treatment of property, plant and equipment. Under IFRS, a company must analyze recognition, measurement, depreciation and potential impairment of its assets according to financial criteria. For tax purposes, however, the Tax Administration maintains specific rules on historical cost, accepted depreciation methods, useful lives and deductibility.
This requires companies to maintain well-structured fixed asset ledgers with sufficient information on acquisition date, cost, useful life, depreciation method, accumulated depreciation, improvements, impairment and tax adjustments. An accounting record may be technically correct and still require reconciliation to determine its tax effect.
Impairment: a frequent difference between accounting and taxation
Impairment is another important issue. From a financial standpoint, recognizing impairment may be necessary to properly reflect the loss in value of an asset. However, for tax purposes, the impairment may not be deductible because it is an estimate.
This does not mean the accounting entry is wrong. It means the company must be able to distinguish the financial treatment from the tax treatment through a clear and documented reconciliation.
Inventories and internal control
Regarding inventories, the resolution reinforces the importance of internal control. Shortages, thefts, destruction or inventory differences must be supported by sufficient documentation and valid evidence. In some cases, an independent certified public accountant report may be required to support the accounting value of missing goods.
This shows that the quality of the accounting record also depends on robust operational processes, physical counts, periodic reconciliations and adequate documentation.
Before 2027: recommended review points
Accounting policies: Are they documented and aligned with IFRS or IFRS for SMEs?
Chart of accounts: Does it allow separation of accounting, tax and temporary differences?
Subsidiary ledgers: Are there reliable ledgers for fixed assets, inventories, intangibles and loans?
Monthly closing: Does the closing process produce useful management information or only tax returns?
Tax reconciliation: Can the company explain each adjustment between accounting profit and taxable income?
Supporting documents: Does every relevant accounting entry have sufficient and traceable source documents?
The entry into force of this resolution as of January 1, 2027 represents an opportunity to review the quality of financial information. Companies should use this period to evaluate their accounting policies, chart of accounts, fixed asset ledgers, inventory controls, intangible assets, lease accounting, revenue recognition, borrowing costs and tax reconciliation procedures.
In practice, the main challenge will not be only tax-related. The real challenge will be accounting and financial: having information that is properly classified, documented, reconciled and explainable. Weak accounting can create tax errors, but it can also limit management’s ability to understand the real profitability of the business, measure risks, access financing or make timely decisions.
For that reason, this resolution should be read as a reminder of the strategic importance of accounting. IFRS are not only a technical requirement; they are a tool to raise the quality of financial information. A company with reliable financial information is better prepared to comply, decide and grow in an orderly manner.
References
General Directorate of Taxation. Resolution MH-DGT-RES-0015-2026, interpretative criteria on the application of IFRS to tax regulations. Published in Alcance No. 45 to La Gaceta No. 78, April 29, 2026.
Tax Code of Costa Rica, Law No. 4755, articles 99 and 128.
Income Tax Law, Law No. 7092, article 51.
Tax Procedure Regulations, Executive Decree No. 38277-H, article 82.
Income Tax Regulations, Executive Decree No. 43198-H, article 86.
Costa Rican Institute of Certified Public Accountants, Circular 06-2022-R on full adoption of IFRS.
Costa Rican Institute of Certified Public Accountants, Circular 21-2018 on adoption of IFRS for SMEs.