...Haydee Tejada February 13, 2011 Case 2 a. Define Comprehensive and Other Comprehensive Income. b. Discuss alternative formats for reporting comprehensive income. c. Explain the usefulness of reporting the components of comprehensive income. Section 220 of the FASB codification discusses comprehensive income and all that’s included when reporting. Comprehensive income is the change in equity of a business during a period from transactions and other events and circumstances from nonowner sources. Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners (FASB ASC 220-10-10-1). Other comprehensive income are the revenues, expenses, gains, and losses that under GAAP are included in comprehensive but excluded from net income (FASB ASC 220-10-15-3). When reporting comprehensive income, it should be presented in two sections, net income and other comprehensive income. The financial statement should show the total amount for net income together with the components that make up net income, the total amount for other comprehensive income together with the components that make up other comprehensive income, and total comprehensive income (FASB ASC 220-10-45-1A). Some items of other comprehensive income includes foreign currency translation adjustments, gains and losses on foreign currency transactions that are designated as economic hedges of a net investment in a foreign entity, gains...
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...CONCEPTS OF NATIONAL INCOME The total net value of all goods and services produced within a nation over a specified period of time, representing the sum of wages, profits, rents, interest, and pension payments to residents of the nation. The important concepts of national income are: 1. Gross Domestic Product (GDP) 2. Gross National Product (GNP) 3. Net National Product (NNP) at Market Prices 4. Net National Product (NNP) at Factor Cost or National Income 5. Personal Income 6. Disposable Income Let us explain these concepts of National Income in detail. 1. Gross Domestic Product (GDP): Gross Domestic Product (GDP) is the total market value of all final goods and services currently produced within the domestic territory of a country in a year. Four things must be noted regarding this definition. First, it measures the market value of annual output of goods and services currently produced. This implies that GDP is a monetary measure. Secondly, for calculating GDP accurately, all goods and services produced in any given year must be counted only once so as to avoid double counting. So, GDP should include the value of only final goods and services and ignores the transactions involving intermediate goods. Thirdly, GDP includes only currently produced goods and services in a year. Market transactions involving goods produced in the previous periods such as old houses, old cars, factories built earlier are not included in GDP of the current year. Lastly, GDP refers...
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...Insights No. 96 May 2012 The Middle-Income Trap: Comparing Asian and Latin American Experiences by Anna Jankowska, Arne J. Nagengast and José Ramón Perea ♦♦ Chinese Taipei; Hong Kong, China; Korea and Singapore (the East Asian Newly Industrialised Countries or NICs) have been successful in attaining income convergence with high-income countries while Latin American countries remain caught in the Middle-Income Trap. ♦♦ The East Asian NICs pursued export-led growth by targeting strategic industries which facilitated gradual diversification and upgrading into new products that required similar skills and inputs. ♦♦ Comparing the experience of the NICs to Latin American economies reveals that successful diversification and upgrading of a country’s export structure requires coherent and complimentary policies in the areas of education, infrastructure, innovation and access to finance. The experience of Latin American with the Middle-Income Trap has been very different from that of the NICs. While the latter were able to surpass middle-income status in a relatively brief period of time, Latin American countries have remained in the middle-income zone for decades. This contrast can serve as an illustrative basis for comparison for new countries entering the middle-income group. The East Asian NICs’ recipe for income convergence: gradual upgrading towards higher value industries The Asian NICs’ experiences suggest that escaping the Middle-Income Trap is a function of structural transformation...
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...UNIT I NATIONAL INCOME AND MACROECONOMICS 1 National Income National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income. Alfred Marshall in his ‘Principle of Economics’ (1949) defines National income as “The labour and capital of a country, acting on its natural resources, produce annually a certain net aggregate of commodities, material and immaterial, including services of all kinds…..and net income due on account of foreign investments must be added in. This is the true net National income or Revenue of the country or the national dividend.” Irving Fisher defined national income as “The national dividend or income consists solely of services as received by the ultimate consumers, whether from their material or from human environments. Thus, a piano or an overcoat made for me this year is not a part of this year’s income, but an addition to capital. Only the services rendered to me during this year by these things are income.” Central Statistical Organization defines National income as “National Income is the sum of factor income earned by the normal residents of a country in the form of wages, rent, interest and profit in an accounting year.” Concepts of National Income There are different concepts of National Income, namely; GNP, GDP...
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...UNIT I NATIONAL INCOME AND MACROECONOMICS 1 National Income National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income. Alfred Marshall in his ‘Principle of Economics’ (1949) defines National income as “The labour and capital of a country, acting on its natural resources, produce annually a certain net aggregate of commodities, material and immaterial, including services of all kinds…..and net income due on account of foreign investments must be added in. This is the true net National income or Revenue of the country or the national dividend.” Irving Fisher defined national income as “The national dividend or income consists solely of services as received by the ultimate consumers, whether from their material or from human environments. Thus, a piano or an overcoat made for me this year is not a part of this year’s income, but an addition to capital. Only the services rendered to me during this year by these things are income.” Central Statistical Organization defines National income as “National Income is the sum of factor income earned by the normal residents of a country in the form of wages, rent, interest and profit in an accounting year.” Concepts of National Income There are different concepts of National Income, namely; GNP, GDP...
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...THE INCOME STATEMENT By Michael Walker Student, Technical Report Writing February 15, 2010 Formal Report Prepared for Lana Sumpter Facilitator, Technical Report Writing Date: February 15, 2010 To: Lana Sumpter, Course Administrator From: Michael Walker Subject: Final Version of “The Income Statement” Report Attached is my report “The Income Statement” which you requested at the start of class on January 7, 2010. The report contains instructions for non-financial personnel to be able to read and comprehend the income statement. The report breaks the income statement down into segments which will allow the reader to better understand the report. This report complied by myself owes a significant amount of gratitude to Benjamin Drummer (CPA, JD, Accounting Instructor) and Vicki Yamasaki (CPA, CRO, One America Insurance) for taking time out their busy schedules to help with the compilation of information. TABLE OF CONTENTS Executive Summary……………………………………………………….. 5 Introduction………………………………………………………………. 6 Background………………………………………………………………. 6 Discussion Gross Profit………………………………………………………. 6 Definitions Description Figure 1 Operating Income (Loss)…………………………………………. 7 Definitions Description Figure 2 Income from Continuing Operations before Income Tax…………. 8 Definitions Description Figure 3 Income from Continuing Operations……………………………… 10 Definitions Description Figure 4 Net Income (Loss)…………………………………………………...
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...WHAT FACTORS AFFECT YOUR INCOME? What are the factors that determine your earnings? Is it your skills, experience, competence, diligence, luck, profession, your network and contacts or your greed? Some people always seem to get more material rewards out of life than others. Many companies have fixed salaries, take it or leave it. Some have job grades with small margins for negotiations, while for some jobs you can negotiate with large margins. Have you ever thought who or what determines how much you earn? Is it your employer, the customers, the industry average, the government or some mysterious ‘market force’ or is it your skills, experience or your connections? Factors Determining Your Income No matter how highly you price yourself, three factors determine the material compensation (meaning money or equivalent) you get for your work. How others value what you do – People who are paying you for your services put a certain measurable value on your contribution. Your skills, experience and the value you add to the buyer of your services or your employer, determine the material compensation you get. This value may be very subjective as some people are more skilful in convincing others that their contribution should be valued higher than that of others. How well you do what you do – This is trickier. It doesn’t mean that if you do your job better than a colleague doing similar tasks at the same workplace, you will automatically earn more. The money value of what you do depends...
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...INCOME TAXATION Preservation of book of accounts All the books of accounts, including the subsidiary books and other accounting records of corporations, partnerships or persons shall be preserved by them within 3 years (except in case of a false or fraudulent return) from the Last entry in each book and for which period the commissioner is authorized to make an assessment Exception: 1. Fraud, irregularity or mistakes as determined by the commissioner; 2. The taxpayer request reinvestigation; 3. Verification or compliance with withholding tax laws and regulation; and 4. In the exercise of the commissioner’s power to obtain information from other persons, in which case, another or separate examination and inspection may be made Keeping of book accounts All corporations, companies, partnerships or persons required by law to pay internal revenue taxes shall keep a journal and a ledger, or their equivalents. 1. Those whose gross quarterly sales, earning receipts or output do not exceed fifty thousand pesos (50,000) shall keep and use a simplified set of bookkeeping records duly authorized by the secretary of finance wherein all transaction and results of operation are shown. 2. Those whose gross quarterly sales, earnings receipts or output exceed one hundred fifty thousand pesos (150,000) shall have their books of accounts audited and examined yearly by independent certified public accountant and their income tax returns accompanied with a duly accomplishment...
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...Chapter 1 - Introduction to Taxation Taxation – is an act of imposing tax. Tax - enforced contribution levied by a sovereign state on persons, property and rights/privileges within its jurisdiction, exercised through its legislative branch, for the purpose of raising revenues to defray the expenses of the government and for public purposes. Nature of taxation – an inherent legislative power of any independent state. Scope of taxation - unlimited and comprehensive but subject to inherent and constitutional limitations or limitations depending on the sense of responsibility of the state to its people. Inherent limitations: 1. for public purpose. 2. Power to tax cannot be delegated 3. Double taxation should be avoided or prevented. 4. Government agencies and instrumentalities are exempted from tax. 5. Imposed only within the territorial jurisdiction of the state. Double taxation is taxing twice, by the same public authority, within the same jurisdiction or taxing district, for the same purpose in the same year or taxing period. Constitutional limitations: 1. Non-impairment of existing contracts. 2. No person shall be imprisoned for non- payment of debt or poll tax. 3. Taxation must be uniform and equitable. 4. All kinds of land, buildings and improvements actually, directly or exclusively used for religious or charitable purposes are exempt from taxation. Basic Principles of a Sound Tax System * Fiscal adequacy – revenue enough to...
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...Income Tax Law Income Tax Law and the National Budget 2010-2011 Md. Abdur Rashid, FCMA B.Com. (Hons.), M.Com., DAIBB, LLB, FCMA Income Tax Law explain changes in tax struc-ure of an economy over time under t the impact of economic development and of political and social factors. Tax structure is affected by economic development in three ways: (a) tax base undergoes a change as the develop- ental process m proceeds; (b) change in the tax base brings about changes in the revenue system: and (c) economic development leads to changes in the objectives of tax policy. Bangladesh Government collects taxes on account of custom duty, sales tax, value added taxes, excise duty, cess, fees, fines, penalties, income tax, advalorem duty, etc. It appears that to fulfill the objectives of tax policy the Government every year brings some changes in various tax laws to collect more taxes on the basis of above tax structure. be established for those items to repair or servicing and thus to reduce the unemployment problems in the country. National Budget Every year before preparing National Budget the National Board of Revenue holds series of meetings with various trade bodies, trade associations, groups of people, various academic and professional Institutions. It seems that this year the discussions have been held on various scopes and opportunities of collecting more taxes. The discussions, of course, have been held in various dimensional scopes. In such a meeting organized by Management...
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...Accounting for Income Taxes I. Overview – Accounting for income taxes involves both intraperiod and interperiod tax allocation. Intraperiod allocation matches a portion of the provision for income tax to the applicable components of net income and retained earnings. Income for federal tax purposes and financial accounting income frequently differ. Income for federal tax purposes is computed in accordance with the prevailing tax laws, whereas financial accounting income is determined in accordance with GAAP. Therefore, a company’s income tax expense and income taxes payable may differ. The incongruity is caused by temporary differences in taxable and/or deductible amounts and requires interperiod tax allocation. II. Intraperiod Tax Allocation – Intraperiod Tax Allocation involves apportioning the total tax provision for financial accounting purposes in a period between the income or loss from: a. Income from continuing operations b. Discontinued operations c. Extraordinary items d. Cumulative effect of an accounting change e. Other comprehensive income i. Pension Adjustment ii. Unrealized gain/loss on available for sale security iii. Foreign translation adjustment f. Components of stockholders’ equity iv. Retained earnings for prior period adjustments and v. Items of accumulated (other) comprehensive income g. General Rule – Any amount not allocated to continuing operations...
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...Income based property tax relief: Circuit breaker tax expenditures. Jeffline joseph Unit 8 project part 4: First draft final paper composition 2 graded assignment This paper explores four publish articles that report on result from research conducted on mechanisms used by states to provide income based property tax relief, commonly called circuit-breakers. The articles, however, vary in their definitions uses of these mechanisms provide property tax relief to overburdened taxpayers. This paper examines issues in circuit breaker program administration are also considered. Numerous studies have been conducted on various facets of tax relationships focusing on the level of poverty in the economy, closeness, property tax relief provided to households based on income. To understand how both the government think of income tax and what the economy thinks about income tax and the relationship are affected are the more common names used. What the government thinks of the income tax the government support the economy on what the people think on how to make life easier and relax life. The government point of view is the fact they provide anti-poverty measure, including food stamps, the Earned Income Tax Credit and unemployment insurance, from the money used on the income tax. What the economy thinks on income most low income parent depend on their monthly work check to provide for their children’s and when the government...
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...2305 5/29/14 Income Inequality Timothy Noah Richard A. Epstein * Inequality is good. (253) * Welch began by stating that “all economics results from inequality. Without inequality of priorities and capabilities, there would no trade, no specialization, and no surpluses produced by cooperation.” (253) * Waitresses, construction workers, dental assistants, call-center operators--- people in these jobs are essentially replaceable, and usually have bosses who don’t distinguish between individual initiative and insubordination. (254) * Welch said that he believed inequality was destructive only when “the low wage citizenry views society as unfair, when it views effort as not worthwhile, when upward mobility is impossible or so unlikely that its pursuit is not worthwhile.” (254) * Finally, Welch argued that the welfare state has made it too easy not to work at all. But the Great Divergence had a more significant impact on the working middle class than on the destitute. (254) * In most contexts, libertarians can fairly be said to place income in very high regard. (254) * The market is king, and what is the market if not a mighty river of money? (254) * Income isn’t what matters, Wilkinson argues; consumption is, and “the weight of the evidence shows that run- up in consumption inequality has been considerably less dramatic than the rise in income inequality.” (255) * The thought that the have-nots are compensating for their low incomes by putting themselves...
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...Chapter 9 Individual: OC/OI Other sources of income 3(a) in Div. B: * CPP pension benefit: can elect to do income splitting – 50% of the combined CPP benefit received. Contributor must be >60 years old * Pension income: 50 of combined pension income. >65: eligible pension income includes annuity payments under RPP.RRSP,DPSP. RRIF <65: RPP + death of spouse payment * Retiring allowance: pension income and death benefits. A. retirement from an office/employment in recognition of long service B. loss of office including court-awarded damages received by taxpayer * Annuity: full amount of annuity payments entitled from an investment of money – capital portion * Amount received from deferred income plans: 1. RESP: life-time contribution limit 50,000, over max. 31 years. Contribution not deductible/ is taxed, accumulated investment income is taxable to beneficiary (<21) as “Educational assistance payments:” a. CESG- Canada educations saving grant: 20% of $2500 of annual contributions to an RESP of children up to 18/ max. of $500 per year per child/ max. CESG per child is $7200/ additional CESG: net income of family <43561, 20% matching of first $500, if NI 43561-87123, 10% b. CLB- Canada learning bond: child bofrn after dec. 31 2004, first CLB of $500, $100 each year including year turning 15. Limit < $2000 per child, can be transferred to RESP before 18 c. Distribution: back to subscriber if hes alive and either beneficiary...
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...of the Income Tax 1. A General Overview of the Income Tax 2. Coverage Scope of the Income Tax 3. Deductions Allowed for Taxation Purposes Part 1. A General Overview of the Income Tax In the RM the unitary income tax was introduced on 1.01.98 and replaced three taxes: the profit tax of enterprises, the individual income tax, and the profit tax of banks and other crediting institutions. In most countries of the world individual and corporate income tax vary; this is why the unification of these taxes is an innovation in the taxation practice. The income tax subjects comprise juridical and natural persons receiving income from any sources on the territory of the RM during the taxation year, and juridical persons-residents, which receive investment and financial income from sources outside the RM. Since there are various interpretations of the terms individual and company in the taxation and civil legislation, we will explain some of them. According to the taxation legislation juridical persons are: 1. Any enterprises, institutions, and organizations involved in enterpreneurial activity with the exception of individual enterprises and farms. 2. Non-residents with an economic presence on the RM territory According to the taxation legislation natural persons are the individual enterprises and farms. According to the taxation legislation, taxation subjects are the entities legally responsible for paying taxes. The income tax object is the net income, including...
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