Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › tax adjusted trading profit and adjusted trading profit.
- This topic has 1 reply, 2 voices, and was last updated 1 year ago by Tax Tutor.
- AuthorPosts
- May 24, 2022 at 10:33 am #656314
Are the terms tax adjusted trading profit and trading profit the same?
1.
If we go back to chapter 4,
We derived adjusted trading profit as follows:Net Profit per accounts
Less: Disallowable income
Add: Expenditure not allowable for tax=Adjusted Trading Profit
than,Less: Capital allowance
=Tax adjusted trading profitthe above shown method of computation was used in Example 1 of chapter 4 and the question requirement specified to calculate tax adjusted trading profit.
2. But, If we look at chapter 6- Cash Basis for small business
The example 7 asked to compute Adjusted trading profit using both accural as well as cash basis. (not tax adjusted trading profit)even though the requirement asked to calculate just adjusted trading profit( which as per chapter 4 do not include Capital allowance dedcution, only tax adjusted trading profit does.)
we deducted the capital allowance to derive the adjusted trading profit while using accural basis.thus i am very confuesed over those terms’ use.
kindly help me clear my confusion sir.May 27, 2022 at 12:20 pm #656630My apologies the requirement should have asked for tax adjusted trading profit to avoid confusion
- AuthorPosts
- You must be logged in to reply to this topic.