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Are the terms tax adjusted trading profit and trading profit the same?
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
Less: Capital allowance
=Tax adjusted trading profit
the 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.
My apologies the requirement should have asked for tax adjusted trading profit to avoid confusion