Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Calculating tax when there is an FYA
- This topic has 5 replies, 2 voices, and was last updated 7 years ago by John Moffat.
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- May 27, 2016 at 12:24 pm #317486
Good Afternoon!
in an apv question, i have run into a tax issue in my cashflow setup.
my method is to setup a workings table as follows:
operational net cash flow
(capital allowance)
———————————–
taxable cash flowthen i apply the tax rate and then subtract these taxes in my main setup of cashflows. tax payments lag by one year.
problem: my final cashflows for year 1 and the last year (yr 5) are wrong. (my computation of CA is correct and matches with the answer)
in this example, there is an FYA and i am applying this to year Zero and calculating the taxable CF. not sure if this is correct.
how do i use this method of minusing CA to cases where there is an FYA?
———————–
please note, i have solved the issue by taking tax savings on the CA and adding them to the cash flows. but i do want to know how to use the above method
thank u
May 27, 2016 at 4:29 pm #317527You can always use the method you outline.
I cannot say where you have gone wrong without knowing which question it was 🙂
May 27, 2016 at 4:58 pm #317539sir….its neptune…. i can even post u my workings but am not sure u wd like that…
May 27, 2016 at 5:16 pm #317547Neptune was set by the previous examiner and he got the timing of his tax flows wrong (he seemed to not fully understand tax rules, which is one of the reasons that he is no longer the examiner 🙂 )
May 27, 2016 at 7:00 pm #317561iohhh!!!!!!! thats a load off my mind…..thank u!!
May 28, 2016 at 7:47 am #317630You are welcome 🙂
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