Tax Accounting

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Tax accounting and reporting behavior : empirical evidence on the effects of book-tax conformity and current trends in Europe

Tax accounting and reporting behavior : empirical evidence on the effects of book-tax conformity and current trends in Europe

The objective of tax accounting is to secure an equal treatment of different categories of income according to the ability to pay principle (Kirchhof (2002), p. 10). 149 The commonly accepted yardstick of the ability to pay principle is the income derived during one period. It is computed for all taxpayers according to uniform, objectified and non- arbitrary rules which are clearly and certainly defined in the tax code (Jacobs (1971), p. 24-27). 150 The decision to tax periodic income requires, at the same time, the acknowledgement of the realization, the nominal value and the net principles as corner stones for the determination of taxable profit (Herzig and Bär (2003), p. 7; Herzig (2005), p. 214-215; Homburg and Bolik (2005), p. 2335), which is already incorporated in the DD’s principles. Moreover, the design of the tax base is embedded in the common economic requirements for tax systems, namely to improve investment conditions and to make locations more attractive for businesses (Sachverständigenrat (2003), no. 558 ff.). The DD is also shaped by these principles (European Commission (2011), p. 4 (Explanation)). On the one hand, this is linked to the call for allowing a loss set-off without any restrictions (either with regard to time or amount) (Jacobs et al. (2003), p. 524). On the other hand, broadening the tax base is compatible with these objectives if, at the same time, tax rates decrease (Oestreicher and Spengel (2003b), p. 936), as this reduces the effective tax burden which is crucial for location decisions (Devereux and Griffith (1998), p. 29; Haufler and Schjelderup (2000), p. 320; Becker et al. (2006), p. 741). Concurrently, interest and liquidity effects of profit determination are diminished (Oestreicher and Spengel (2003a), p. 85 ff.). The postulate of decision neutrality, however, does not provide specific provisions with regard to the determination of the tax base. Analogously, the ability to pay principle is by far too vague in order to deduce precise rules for the computation of taxable income. This problem already prevails for the clear definition of corporate income (Hennrichs (2001), p. 307-328; Treisch (2001), p. 316; Wagner (2002), p. 1888; Weber-Grellet (2002), p. 702). In particular, however, this relates to the dualism of income computation according to which income is either
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Tax Accounting for Prepaid Items

Tax Accounting for Prepaid Items

Tax Accounting for Prepaid Items SMU Law Review Volume 12 | Issue 3 Article 4 1958 Tax Accounting for Prepaid Items B J Barton Follow this and additional works at https //scholar smu edu/smulr This Co[.]

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TAX RESEARCH Financial Accounting versus Tax Accounting - Tax Rules’ Impact on Investment Decisions

TAX RESEARCH Financial Accounting versus Tax Accounting - Tax Rules’ Impact on Investment Decisions

accordance with the laws of the country. We will first discuss the theory of corporate tax avoidance. This includes the relationship between shareholders, management, and government and potential agency issues that may arise in corporate tax avoidance. Avoiding taxes has consequences for managers, shareholders, creditors and the government. The difference between income tax and accounting revenues depends on many factors. Most of these factors are the result of the two systems which have different objectives, and these objectives shall be governed by the laws and rules defined by the state (accounting for tax purposes) and on the basis of International Accounting Standards -financial reporting (now on referred as IAS).In theory IAS’s objective is to show a more realistic value of the firm and to inform the stakeholders (shareholders, potential investors, company employees, senior management, board of directors, etc.). Rules and laws dealing with taxes are affected by many macroeconomic factors, legislators and state interests. Lawmakers set the tax rules in order to increase revenue and stimulate the local economy.
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Recent IRS guidance sheds light on tax accounting method issues

Recent IRS guidance sheds light on tax accounting method issues

In ILM 201442049, the IRS Chief Counsel’s office concluded that a change in the treatment of participation agreements to recognize the gains in the year of realization constitutes a change in method of accounting under Section 446. Further, the recognition of a Section 481(a) adjustment is needed to eliminate any distortions caused by the accounting method change and such adjustment should include gains realized (but not recognized under the old accounting method) in a closed tax year. The taxpayer, an investment advisor, entered into management agreements with related hedge fund entities. Under the agreements, the taxpayer provided investment services to the hedge funds and was compensated through management fees equal to a percentage of the fund’s net assets. The taxpayer also was entitled to incentive fees each year equal to a percentage of the net appreciation in the fund’s shares, but could choose to defer the incentive fees for a specified period. During the deferral period, the fees were deemed to be reinvested in the applicable fund and could increase or decrease in value depending on the performance of the fund’s assets.
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legal tax accounting audit insurance issues

legal tax accounting audit insurance issues

a difficult task since we do not know yet the future structure of the tax system. IKZE may yet prove to be an interesting form of saving for those who expect their revenues to decline in the future. Either way, by saving with IKZE we can benefit from tax relief, whereas in the case of IKE, the real advantage will be visible upon retirement. Yet the experts emphasise that clients may find the structure of IKZE much more interesting than that of IKE. Indeed, the former encourages its holder to make savings and deduct the invested amounts from the revenue that serves as the basis for taxation with PIT, which results in an immediate tax relief.
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16 Tax Accounting II (3) CSU Prerequisite: Accounting Introductory Accounting I (5) UC:CSU

16 Tax Accounting II (3) CSU Prerequisite: Accounting Introductory Accounting I (5) UC:CSU

Note: Accounting 21 plus 22 are equivalent to Accounting 1. Maximum UC Credit is 5 units. Both Accounting 21 and 22 must be taken for credit to be given. This course is designed for a student interested in a general knowledge of basic accounting principles, but seeks a shorter, more concentrated course than is offered in Introductory Accounting. It’s best suited for a student who is not an accounting or business administration major, who is seeking occupation in the business or secretarial field or for per- sonal bookkeeping procedures.

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YOUR PRACTICE, ANYWHERE JOURNEY TO THE CLOUD TAX & ACCOUNTING

YOUR PRACTICE, ANYWHERE JOURNEY TO THE CLOUD TAX & ACCOUNTING

Portals also allow you to reduce printing, postage, and filing costs, while saving you time with instant document exchange. When tax returns, financial statements, and other documents are ready, just post them in the clients’ portals for their review. Your time is freed up to offer a wider variety of services, attract new clients, and strengthen your relationship with your existing clients.

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Checkpoint Learning cl.thomsonreuters.com. tax & accounting

Checkpoint Learning cl.thomsonreuters.com. tax & accounting

only we provide the current, relevant course content you need in a multitude of formats that are both convenient and affordable. We offer more than 900 courses on accounting, auditing, tax, management, Yellow Book, staff training, and more. These high-quality courses are available in a wide spectrum of media: seminars, conferences, on-site training, online learning, webinars, and self-study in print or

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Life Settlements: Tax, Accounting, and Securities Law Issues

Life Settlements: Tax, Accounting, and Securities Law Issues

Singer and Stallard, Reply to The Life Settlements Market: An Actuarial Perspective on Consumer Economic Value (Nov. 2005): “In this article, we review the DeloitteConsulting – University of Connecticut Actuarial Center Report (“Carriers’ Report) on the secondary market for life insurance. We identify several problems with the actuarial model used by the authors, including the use of mortality tables, tax assumptions, and impairment levels. Setting aside those serious actuarial errors, most of the study’s findings violate basic economic logic. The study argues that holding a policy until death is the best strategy for policyowners in almost every contingency. While it may be true that holding a policy until death maximizes the value of the policy at the time of death, it does not necessarily follow that such a strategy is the utility-maximizing strategy for all policyowners at any point in time before death. The Carriers’ report concludes that participa- tion in the secondary market generally harms policyowners, and greater regulation is therefore needed. Because these conclusions are based on faulty premises, they should generally be ignored”.
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MONEY BREEDERS TAX & ACCOUNTING INC.

MONEY BREEDERS TAX & ACCOUNTING INC.

M ONEY B REEDERS INCLUDES THE COST OF S TANDARD C OVERAGE A SSURANCE I NSURANCE WITH ALL TAX PREPARATIONS . T HE INCLUDED FEES ARE AS FOLLOWS : FOR EACH TAX RETURN , A CHARGE OF $250 IS ADDED FOR M ONEY B REEDER ’ S A SSURANCE I NSURANCE . AN ADDITIONAL $100 IS INCLUDED FOR EACH OF THE FOLLOWING : D, ( CAPITAL GAINS / LOSSES ), E ( RENTAL PROPERTY ) AND / OR F ( FARMING OPERATIONS ); ADDITIONALLY , A CHARGE OF $100 IS ASSESSED FOR COVERAGE OF A 1040-X ( AMENDMENT TO FILED RETURNS ) AND / OR A RETURN FILED ON EXTENSION . I F BUSINESS ELECTS EXTENDED COVERAGE , BUSINESS IS CHARGED DOUBLE FEES AS QUOTED HEREIN . *A SSURANCE I NSURANCE IS IN EFFECT FOR THE LIFE OF M ONEY B REEDERS PLUS THREE YEARS ; AFTER WHICH , M ONEY B REEDERS IS NEITHER LIABLE FOR ANY CLAIMS NOR A TAX RETURN ( S ) PREPARED BY MONEY BREEDERS . I NDIVIDUAL TAX RETURNS ARE COVERED FOR OPEN TAX YEARS ( AS DEFINED BY THE IRS/FTB). IF A TAX YEAR IS CONSIDERED A CLOSED YEAR , THE A SSURANCE I NSURANCE IS NOT APPLICABLE .
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Kasik Tax & Accounting 2014 Tax Service Engagement Letter

Kasik Tax & Accounting 2014 Tax Service Engagement Letter

(I understand that if this is a lengthy call (turns into a phone appointment) that I will be billed for the time) Please note – if you just have a couple of simple questions and we don[r]

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The ethics of tax accounting  Is there a conflict?

The ethics of tax accounting Is there a conflict?

This dependence has yet to create a responsibility to act ethically not take account of the interests to provide equal opportunities for information. The moral value of an action is finally in compliance with the rule imposed that does not create the possibility of manipulation of information in order to mislead. However, the creative accounting practices that make their presence felt, indicates the need for further improvements to accounting standards and code of ethics. Thereby, accounting and financial reporting will not be compromising the quality and will serve the market requirements.
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ACCOUNTING AND TAX REPORTING OF FINANCIAL RESULTS

ACCOUNTING AND TAX REPORTING OF FINANCIAL RESULTS

In addition, a number of differences in the formation of the financial result in the accounting and tax accounting derives from the right of the taxpayer to determine the income and expenses on the basis of two ways: either as payment or either according to transportation of goods, work and service. Given that the accounting data is generated based on an assumption of time certainty of economic activity (accrual), the application for tax purposes is face with difficulty with the formation of the tax base, especially in the part of the expenses, which are deductible .
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Unitary Taxation: Tax Base and the Role of Accounting

Unitary Taxation: Tax Base and the Role of Accounting

This is also true when it comes to the profit concept. In essence financial reporting considers a profit or loss to be the increase or fall in the capital value of an enterprise as shown by its balance sheet worth over a period, having taken out of account movements in equity and distribution of reserves. This makes profit or loss a residual of transactions of all sorts, with little qualitative differentiation. Tax necessarily must take a different approach, and the EU's CCCTB provides appropriate and clear indication of that. Transactions are necessarily considered on the basis of their specific type, and not as an amalgam as is the case in financial reporting. Each source of revenue has to be considered in its own right to assess whether it is subject to tax or not, and expenses may be offset only if allowed by the realisation principle, and only if that expense is explicitly permitted as a deduction for tax purposes. By definition, therefore, taxable income as defined in this way has a limited relationship with profit seen from the perspective of financial investors. Taxable income can be considered as a subset of all the transactions that may contribute to such profit, and the task of tax accounting is then seen as being the identification of the transactions within this subset that have a tax consequence and excluding all others.
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Responses of firms to tax, administrative and accounting rules : evidence from Armenia

Responses of firms to tax, administrative and accounting rules : evidence from Armenia

The administrative notch: Second, we study firms’ response to an administrative size dependent threshold which aims to benefit smaller firms by creating favorable rules of tax administration for SMEs. The threshold is set at 100 million AMD of total annual gross income (60 before 2009) or about 240,000 USD. The thresholds applies to both VAT and corporate income taxes. First, firms with turnovers not exceeding the threshold are allowed to file tax returns and make the respective payments on a quarterly rather than monthly basis. Second, these small and medium-size enterprises can use simplified tax accounting procedures instead of having to comply with the International Financial Reporting Standards (Republic of Armenia 2014a, Artcile 2, paragraph 3). The lower frequency of tax returns is also applicable for firms employing not more than 5 employees independent of their income, which we can use to disentangle any potential responses to the two incentives.
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Book-tax differences : a function of accounting tax misalignment, earnings management and tax management

Book-tax differences : a function of accounting tax misalignment, earnings management and tax management

Ignoring deferring tax accounting, prior research asserts that firms are able to inflate book income without tax consequences or undertake substantial tax reducing activities without affecting financial reporting. Plesko (2003) estimates that for each dollar of income increasing discretionary accrual recognised for financial reporting purpose, taxable income is increased by 0.326 dollar. By contrast, firms with income decreasing accruals are estimated to reduce taxable income by 0.630 of the amount, implying that firms either exploit opportunities to recognise greater book income when the tax costs are small, e.g. in tax holidays or with tax losses, or firms enable to minimise the tax effects of increased book income through other mechanisms but keep book income constant. It is consistent with a report on Enron conducted by the Joint Committee on Taxation (2003), which points out firms are able to aggressively manage their tax reporting income by using transactions that affect only taxable income, without (or with very little) impacts on the amount of pre-tax income reported to shareholders. As reported, from 1995 to 2001, Enron created twelve transactions with more than $2 billion in additional financial accounting income through a reduction in the tax expenses.
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Income tax, BAS and accounting fundamentals. Modules 1-5: Extracts

Income tax, BAS and accounting fundamentals. Modules 1-5: Extracts

A living away from home allowance (LAFHA) is the only cash allowance that is subject to the FBT provisions and not assessable to the employee. The benefit of paying a LAFHA is that the whole or a part of it may not be subject to tax depending on the particular circumstances. A LAFHA is an allowance paid by an employer to an employee to compensate for additional expenses incurred and any disadvantages suffered because the employee is required to live away from their usual place of residence in order to do their job. To receive a genuine LAFHA, it is necessary that the employee has moved to a new locality with an intention to return to their previous locality at the end of a finite term (for example, moving interstate for 6 months to establish a new branch office).
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Who bears the costs of the corporate income tax? Evidence from state tax changes and accounting data

Who bears the costs of the corporate income tax? Evidence from state tax changes and accounting data

We acknowledge that our treatment of incidence is somewhat incomplete because we are unable to identify price elasticities. Price elasticities refer to the changes in demand or supply associated with a change in price. In other words, price elasticities represent the sensitivity of demand and supply to changes in price. Corporate income tax incidence depends on relative elasticities in the markets between firms and stakeholders (i.e. in the market between firms and consumers, the market between firms and suppliers, etc.). Intuitively, if demand is highly sensitive to price (i.e. elastic) while supply is not (i.e. inelastic), an increase in the price of a good will result in 1) a substantial decrease in quantity demanded but very little decrease in quantity supplied. Moreover, if demand (supply) is perfectly inelastic, then the full amount of the tax will be borne by producers (consumers). In this study, we are unable to identify elasticities, as are most incidence studies (e.g. Hassett and Mathur 2015; Fuest et al. 2018). For example, if demand for labor by firms is relatively elastic and the supply of labor to firms is inelastic, a corporate tax rate increase would result in incidence on labor and little incidence to the firm (and to its shareholders, ultimately). Thus, to the extent we identify incidence on a stakeholder, we infer that 1) the firm passes on taxes to the stakeholder and 2) stakeholder elasticity is relatively high.
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Specificity of Accounting and Tax Treatments related to Triangular Foreign Trade Transactions

Specificity of Accounting and Tax Treatments related to Triangular Foreign Trade Transactions

Thus, in order to achieve the goals set through the scientific approach that targeted the accounting information and management of triangular foreign trade transactions, the research methods used were based both on general and specific approaches, using in particular documentation, case study or benchmarking, an aspect that allowed us to conclude that the study made has also acquired an empirical nature, in addition to the descriptive one, materialized in the analysis carried out on tax and accounting information from the entities performing foreign trade, a research whose information support is based, in addition to the studied literature related to the investigated field, on the tax, customs and accounting laws specific to triangular foreign trade transactions, but also on the data collected from the entities under study.
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Application of Tax and Accounting Depreciation Based On IAS / IFRS and Legislation in Slovakia

Application of Tax and Accounting Depreciation Based On IAS / IFRS and Legislation in Slovakia

Tax depreciation is governed by Act no. 595/2003 Collection of Laws, on income tax. The Annex no. 1 of the Income Tax determines the classification of fixed assets by depreciation groups. The article 26 defines the depreciation periods, depending on the depreciation group. Under current tax legislation in Slovakia there is the possibility of applying of balanced or accelerated depreciation methods. Depreciation method selected for particular asset can not be changed over the whole depreciation period. Law on Income Tax provides the option to interrupt booking of tax depreciation, without setting up the limit for how long the interruption can last. Tax depreciation is annual. Act through the provisions of § 23 defines that the property which is excluded from depreciation (for eg. land, levees, national movable cultural heritage).
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