Transition to new accounting standards
Beware of the tax repercussions which follow the changes summarised in this week’s newsletter.
Reported profits of a business are the starting point for computing taxable profits for income tax or corporation tax purposes. On transition from one valid basis of accounting to another, a significant number of accounting adjustments may be required and these could have a crucial impact on your clients’ tax liabilities. Positive adjustments (i.e. those that increase profits or reduce losses) are taxed as receipts, and negative adjustments are allowed as expenses.
This is an
extract from our tax tips newsletter dated 7 May 2015. The newsletter
itself contained more details and links to related source material for this story. And, of course there were the
other two topical, timely and commercial tax tips. It’s clearly written
and extremely good value for accountants in general practice. Try it
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