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The tax amortization period might be different from the useful life used in accounting. For example, while trademarks can have an indefinite useful life for accounting purposes, the tax legislation of the United States establishes a mandatory 15-year amortization period for trademarks.
In financial accounting under International Financial Reporting Standards (IFRS), a provision is an account that records a present liability of an entity. The recording of the liability in the entity's balance sheet is matched to an appropriate expense account on the entity's income statement .
A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, [1] pronounced / ˈ iː b ɪ t d ɑː,-b ə-, ˈ ɛ-/ [2]) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base.
The accounting for long term contracts using the percentage of completion method is an exception to the basic realization principle. This method is used wherein the revenues are determined based on the costs incurred so far. The percentage of completion method is used when: Collections are assured; The accounting system can: Estimate profitability
In India, gratuity is a type of retirement benefit. It is a payment made with the intent of monetarily helping an employee after his or her retirement. It was held by the Supreme Court of India in Indian Hume Pipe Co Ltd v Its Workmen that the general principle underlying a gratuity scheme is that by service over a long period the employee is entitled to claim a certain amount as a retirement ...
The Pre-Tax Provision Method provides a single ratio that expresses overall debt service capacity reliably given these challenges. Debt Service Coverage Ratio as calculated using the Pre-Tax Provision Method answers the following question: How many times greater was the company's EBITDA than its critical EBITDA value, where critical EBITDA is ...
The sequence of additional payment, tax calculation, additional payment continues until the recipient receives the same amount, net of all the taxes, as would have been received had there been no taxes. The formula for calculating the total amount of a grossed-up payment is (the amount of the payment) divided by (1 minus the tax rate). Thus, a ...
The rules for calculating the original issue discount utilize a compounding interest formula, with the principal recalculated every six months. Section 1272(a) of the tax code requires that the Original Issue Discount is includible in the lender's taxable income at the end of each tax year, or part of the tax year if the loan was not owned for ...