5. Opening balances of X ltd as on 1stApril 2005 Capital = 50000; 10% Convertible Debentures = 100000; Creditors = 50000; Provision for taxation = 10000. Stock of goods (5000 units @ 5) = 25000; Debtors : 50,000; Plant = Original Cost 100,000 ( Accumulated Depreciaiton =55000); ...
The provision for depreciation is an accounting and a taxation term. Most fixed assets such as plants, equipment and vehicles decline in value over time as they are used and as they age. The provision for depreciation accounts for this by lowering their value each year on financial statements ...
Provisions are funds set aside for specific probable future expenses or other financial impacts such as losses in value. Financial obligations are categorized as provisions when they are likely to affect the company’s finances, but there is uncertainty about their value or timing. ...
Non-qualified annuities are purchased with monies which have not enjoyed any tax-sheltered status and for which taxes have already been paid. A part of each monthly payment is considered a return of previously taxed premium and therefore excluded from taxation. The amount excluded from taxes is...
Deferred taxation refers to the postponement of tax payments on income or gains to future periods, typically resulting in a temporary difference between taxable income reported for financial accounting purposes and taxable income reported for tax purpose
In order to understand taxation and to decide on the key issues we must begin by asking two basic questions: what are taxes and why do we need them? We will find that taxes play a much larger role in the economy than the mere raising of revenue. They make possible the provision of ...
Prohibitions of tax discrimination have long appeared in constitutions, tax treaties, trade treaties and other sources, but despite their ubiquity little agreement exists as to how such provisions should be interpreted. This has led prior commentators to conclude that tax discrimination is an incoheren...
The Supreme Court ruling determined that severance pay is classified as wages and is, therefore, subject to taxation. To avoid dissatisfied employees, the severance agreement should clearly state the type of severance pay and how it is taxed. Employer Withholding Obligations Because severance payments...
rather than theordinary incometax rate that is applied to investments held for less than a year. In addition, offsetting taxable capital gains with current or past capital losses can reduce the amount of investment profit
Double taxation often occurs becausecorporationsare considered separate legal entities from their shareholders. As such, corporations pay taxes on their annual earnings, just like individuals. Double taxation is often an unintended consequence oftax legislation. It is generally seen as a negative element ...