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Please, Open Tuition Team, can you kindly help me delete this post of mine from 2010 as it contains sensitive information? Thank you
Dears, I greet u all as we forge on with pursuit of our dreams. I’m wondering if there are any recommendations as to an affordable mentor out there? Any links and prices will really help
BPP Learning Media and Kaplan Publishing are 2 of the ACCA’s approved tuition providers. You can purchase from the provider you prefer, so just start by Googling “Buy BPP/Kaplan text”.
Jesus, you might just be an ACCA entrant little baby? (hihi..LUCK!)
Wow, thank you so very much guys. Can’t believe how much help is in your contribution
So…
Goodwill = an Intangible asset
Intangible assets = are identifiable.Therefore I’ve learned:
Goodwill = IS itself identifiable …as being a “collection of any other things/assets that are not”.
Hope I’m right. Thank you!
Tax base relates to the company. Temporary differences, as the name implies, are only temporary but will eventually have to be leveled up. They occur because the basis on which the company prepares its financial statements is different from that used by tax authorities. For example … Depreciation calculated and recorded for corporate assets is not considered by tax authorities but they give capital allowances which don’t equal the depreciation charged by the companies in the SAME period…hence there will be a temporary difference which will be solved with time as the depreciation and capital allowances vary with time. Since depreciation and capital allowances affect profit for the period, the company needs to be able to estimate what it will have to pay as tax, and since this is unknown for sure, they make a provision called ‘Deferred tax’.
Thank you, Nadeem.
Would appreciate anyone who points me to some kind of relevant online work source (e.g. Link) as I am in a non-native speaker location and it’s kind of hard.
Good luck, Nadeem!
tranghungsg, thanks for your kindness: please send me the F9 soft copy too and I’ll be all so grateful. My email: earreybhit@yahoo.com
Thanks a lot !!Continuing from Wannabeacct’s proforma, you can see that you have Trading income. In a typical question, you will have to GO AWAY from this basic proforma to RE-CALCULATE trading income for TAX PURPOSES.
WHY ADJUST?
The profit (Net) as shown on company accounts (Accounting Profit) is profit which includes some items like Depreciation which have been subtracted by the company as an expense. Therefore these “disallowed” expenses reduce the company’s profits — and remember HMRC is looking to tax something from those profits! The smaller they are, the less HMRC gets. So they have to be made “just”. Depreciation for example is subjective. The entity could make it huge so that profits to be taxed would be small, hence their tax liability. So a NOT SUBJECTIVE provision is made in another form which is in this case Capital allowances (see this as Depreciation, even as it has reducing balance etc kind of stuff). But the directors can go around this, and it is same for everybody. OK, other expenses, mostly which are not incurred exclusively for business purposes are usually subtracted from the entity’s income to arrive at this net profit. So for Tax purposes, these need to be added back so as to get taxed.You have also noticed that some figures are rather being SUBTRACTED in the adjustment. WHY? They are income which the company considers in its accounts, but which are not to be taxed (exempt for tax purposes) or which are taxed elsewhere. So HMRC tries to be fair by removing this income (not taxing it). But you must know the rules …. which is exempt income for tax purposes? eg. ISA interest received. The entity has this in its accounts as income. If left that way, they would be taxed … but they are NOT to be taxed!! So we subtract them from the profit to be fair. Next e.g … Which income is taxed elsewhere? e.g Income from sale of plant and machinery. This income must be removed and taxed under CGT where completely another rate and other rules apply. Finally at this stage, we get the ADJUSTED trading profit (for tax purposes). Notice the difference with ACCOUNTING profit (entity’s). NEXT … we will calculate the CAPITAL ALLOWANCES (“depreciation”) and subtract it from this adjusted profit to get the final figure. Well, sometimes you’d be asked to ignore capital allowances if the focus of the question is on adjusting the profit and so too long to deal with capital allowances. Sometimes the capital allowances will be very short – for a few items only, and so you need to be prepared for either case. You can get the general point.
THE BIG PICTURE:
Now, go back and remember Wannabeacct’s proforma … remember we’d GONE AWAY from it to do all this adding back and subtracting. That figure you see there (well, what should be there) for TRADING PROFIT/INCOME is NOT what the entity holds in its accounts. It is what we have come up with after adjusting their profit and taking off capital allowances.The basic income tax computation itself is very very simple. But you will never just be given Employment income = x, Trading income=y, property income=z etc as you see on that proforma. You will often need to GO AWAY to work out one or more of those incomes (e.g Trading income) for TAX PURPOSES, and then COME BACK and fit the figure in.
Please let me know if this has helped, and especially if you have understood the reason why profits need to be adjusted..
Try this …
Purpose: Arrive London (liken to Obtaining audit evidence and forming opinion).
STRATEGY = Use plane/boat/car? What hour’s? etc …. You decide on e.g Plane leaving @ 10 (and which is subject to this and that setback/risk which you must deal with, such as possible missing out if confirmation is not done on time).
PLAN = Confirm reservation a day before (call the agency), get up at 6, catch the bus at 8 etc.
You can see that the strategy is somewhat “general” while the plan is “detailed” and specific.
Hey Gzzn, I can’t find where you posted the F8 notes. Pls kindly copy me too with the rest of the notes
earreybhit@yahoo.com
Thnx
For F8 Intl, for the December 2010 exams, can full reliance be placed on OT notes, videos and solving past questions without needing to look into a huge textbook such as BPP’s?
” no extra blank paper if offered for calculation but you can write directly on the subject, that’s what I usually do and so far it was not a problem”
What does that mean? Means you CAN’T CALCULATE outside the answer sheets (like testing) before answering a question? If so, what’s the remedy for a wrong step?
Thanks, John. Due to the structure of the course notes, I was thinking these “additional” (to those in the syllabus/guide) have some kind of tie with those specified in the syllabus.
Thanks again and be blessed with more and more knowledge and prosperity!
