...and Family Table of Contents Question A 3 1) Causes of Pension Crisis 3 2) “Money Purchase” Pension Scheme 4 3) Thinking about Pensions 4 Question B 6 Buy-to-let Property Investment 6 Question C 8 Question D 10 Importance of Writing a Will 10 Bibliography 13 Appendix I 14 Question A Causes of Pension Crisis Pension crisis refers to the difficulty predicted in settlement of pensions due to the difference that exists between the resources held by the pension and the obligations that are supposed to be paid by the pension. This means that the resources that have been set aside to pay for the pension obligations are not enough. The pension crisis is mainly caused by the factors explained below; Firstly, rapid growth of the ageing population as a result of couples postponing child bearing coupled with the general decline in the rate of birth per couple. Consequently, the working-age population decreases hence the taxes collected to cater for the pension payments. As a result the government system of pay-as-you-go becomes unsustainable. Secondly, the crisis is caused by longer lives of people sue to medical improvements thus consuming pensions for a longer time. Thirdly, a shift in prioritization of targets that are short-term like travel and purchasing of houses over planning for retirement among the young working population is also a cause for the pension crisis. Fourthly, the mounting pressure on governments for tax reduction...
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... a neighboring city, predicting that this will ease the bad repetition of this area. However, these renovations and changes are only temporary solutions since they are only masking the problems that put my home county deeper in debt. Crime and drug trafficking is still on the rise. People are still losing their homes and debt is at an all-time high. The permission of choosing my CAFR allowed digging deeper into this growing problem by discovering who regulates drug and crime programs, the debt position, and other municipals relating to the well-being of my hometown. In this paper, I will address the crisis relating to a nonmajor governmental fund program designed to aid in the decline of crime and drugs and the recent trend relating to pension debt and the tax debt of the general, agency and enterprise fund. The drug and education program are vital in PG based on four fund comparisons on two statements. According to PG CAFR in the Combining Statement of Balance Sheet- Nonmajor Governmental Funds (balance sheet) and the Combined Statement of Revenue, Expenditures and Changes in Fund Balances-Non Government Fund (Statement of REC), the county had total assets of $6, 961, 225 and total revenue of $2, 095, 042, which ultimately provide the Drug Enforcement and Education Program (DEEP) a staggering figure of $9,056,267[ii]. DEEP proceeds come from the...
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...()10962581, Tutorial Group 2 ___________________________________________________________________________ 1. Exhibit 1 and 2 report the income statements and excerpts from the notes to Marks and Spencer’s financial statements for the fiscal years ending between March 21, 2005 and March 31, 2009. Critically analyze M&S’s accounting choices. What choices may have helped the company to overstate its net profits between 2005 and 2009? In the report, it states that Marks and Spencer was criticized for the company’s accounting for pension liabilities, intangible assets, and depreciation. In regards to pension liabilities, Marks and Spencer reports these liabilities as equity. In 2007, M&S sold and leased back 1.1 million of its property portfolio to a joint venture with its own pension fund. M&S has full control since it was leased back from the joint venture, therefore making it equity. The result of this was reducing M&S’s pension liability. Another issue is that Marks and Spencer Group treats the software costs as an intangible asset. These costs include external direct costs of material and services and the payroll/payroll related costs for employees. Typically, the capitalization of intangible assets, particularly software development outlays, is prohibited because the benefits with these outlays are uncertain. However, Marks and Spencer capitalizes and amortizes these software development costs. This can overstate the profits because theses costs are being...
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... Long-term debt liabilities appear on the company’s balance sheet and can include bonds payable, long-term notes payable, mortgages payable, pension liabilities, and lease liabilities (Kieso, Weygandt &Warfield). A corporation’s bylaws usually require approval by the board of directors and the stockholders before long-term debt arrangements can be made (Kieso, Weygandt &Warfield). A bond is basically a company’s promise to pay an amount of money at a specific maturity date, including periodic interest at a specified rate on the maturity or face value amount. The bond is valued at the present value of the expected future cash flows. Investors may be willing to pay a different rate the stated rate. This difference between the face value of the bonds and the present value set by the investors’ results in either a discount or premium (Kieso, Weygandt &Warfield). The accounting for notes is very similar to the accounting for bonds. Like a bond, a note is valued at the present value of its future interest and principal cash flows. The company amortizes any discount premium over the life of the note, just as it would the discount or premium on a bond (Kieso, Weygandt &Warfield). The most common form of long-term notes payable is a mortgage note payable. This is a promissory note secured by a mortgage that pledges title to property as security for the loan. In a mortgage notes payable, the borrower usually receives cash for the face amount of the mortgage note. The face...
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...CHAPTER 6: NON-BUSINESS SOURCE INCOME Introduction Section 4 of the Income Tax Act, 1967 set out the main classes of income on which tax is chargeable. Section 4(a) and Section 4(b) is discussed under Business Income and Employment Income respectively. Section 4 (c), Section 4(d), Section 4(e) and Section 4(f) is covered under this chapter as other sources of income. Section 4(c) Dividend Income Dividend is a distribution of company’s profit to its shareholders by way of cash or non-cash for example distribution of company’s assets or investment shares. The amount distributed to the shareholders will be in proportion to their existing holding. Dividend received by shareholders is a taxable income by virtue of Section 4(c) Income Tax Act, 1967. Dividend distributed, paid or credited by a company that was a Malaysian tax resident at the time the dividend distributed, paid or credited is deemed to be derived from Malaysia. [Section 14 Income Tax Act, 1967] Example 1 Infinity International Sdn Bhd was tax resident in Malaysia since 25.10.2002 as the management and control was in Malaysia. On 31.12.2010, the management and control was started to be exercised in Hong Kong. Is the income a Malaysian source? Tax Imputation System (Section 108) – old system All dividend (except for tax exempt dividend) distributed, paid or credited by a company resident in Malaysia are subjected to a deduction of tax at source at the company’s tax rate (25% as per year of assessment...
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...HW No. 5 Answer the following questions from the textbook: E6 - 35 Estimating Useful Life and Percent Used Up The property and equipment footnotes from the Deere & Company balance sheet follows The property and Depreciation A summary of property and equipment at October 31 follows: Property and Equipment (millions) | Useful Lives (years) | 2010 | 2009 | Land | | $113 | $1,166 | Buildings and building equipment | 23 | 2,226 | 2,144 | Machinery and equipment | 11 | 3,972 | 3,826 | Dies, patterns, tool, etc. | 7 | 1,105 | 1,081 | All other | 5 | 685 | 672 | Construction in process | | 478 | 362 | Total at cost | | 8,579 | 8,501 | Less accumulated depression | | 4,856 | 4,744 | Total | | $3,723 | $3,457 | Property and equipment is stated at cost less accumulated depreciation. Total property and equipment additions in 2010, 2009 and 2008 were $802 million, $798 million and $1,147 million and depreciation was $540 million, $513 million and $467 million, respectively. a. Compute the estimated useful life of Deere’s depreciable assets at year-end 2010. (Hint: Exclude land and construction in process.) How does this estimate compare with the useful lives reported in Deere’s footnote disclosure? b. Estimate the percent used up of Deere’s depreciable assets at year-end 2010. How do you interpret this figure? E6 – 37 Computing and Assessing Plant Asset Impairment On July 1, Zeibart Company purchases equipment for $225,000. The equipment has an...
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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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...payable within a year or the operating cycle of the company, whichever is longer. Long term debt is a way to finance and gain capital when the company cash flow is minimal. To name a few types of long term debt: bonds payable, notes payable, mortgages payable, pension liabilities, and lease liabilities. This assignment will define basic terms such as long-term debt, bonds, mortgage, and capital leases. In addition answer questions in reference to the ABC Company journal entries, postretirement and note disclosure. A bond arises from a contract known as a bond indenture. A bond is a form of a long term promissory note that is regulated under the federal securities law or state laws. Typically, a bond represents a promise to pay. Bonds are a unique way to raise capital for organizational needs. Bonds are accounted for in a similar to notes payable with the exception that bonds are normally issued to different lenders. These lenders, also known as investors, may sell their bonds to another investor prior to their maturity. There are several types of bonds, however, the more common forms of bonds are secured and unsecured bonds. Secured bonds are backed by the borrower’s collateral, thus meaning no tangible property or any other kind of product is attached to that debt. A well-known example of a secured bond is a mortgage. As for the unsecured bonds, there is no collateral required and common examples of unsecured debts are arrangements such as credit cards, medical bills...
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...Questions for students 1. Exhibits 1 and 2 report the income statements and excerpts from the notes to Marks and Spencer’s financial statements for the fiscal years ending between March 31, 2005 and March 31, 2009. Critically analyze M&S’s accounting choices. What choices may have helped the company to overstate its net profits between 2005 and 2009? 2. Exhibit 3 provides information about the liability that Marks and Spencer reclassified as equity. Do you agree with the decision to reclassify? What will be the effect of this decision on future financial statements? Case analysis Question 1 Exhibit 2 shows various note disclosures related to Marks and Spencer’s accounting choices for non-current assets, leases and pensions. Following is a discussion of some of the accounting methods that Marks and Spencer may or could have used to boost accounting performance during the past years. Depreciation of fixtures, fittings & equipment Marks and Spencer’s depreciation policy for fixture, fittings & equipment is to depreciate the assets to their residual values over a period of 3 to 25 years. Although it may be difficult to evaluate whether the company’s useful life estimates are reasonable without more detailed information, the analyst can evaluate trends in depreciation expenses as a percentage of assets’ initial cost. TABELA It appears that Marks & Spencer gradually reduced its depreciation expense (as a percent of average cost) from close to 8 percent in 2006...
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...Lesson 13: Investing in Mutual Funds What is a mutual fund? * A mutual fund is a professionally managed pool of money invested in stocks, bonds and other securities. * By purchasing mutual funds, small investors can easily diversify their investments and enjoy the benefits of professional management. * Investors own units or shares in the fund and benefit proportionately from any increase in value and/or income earned by the investments owned by the fund. The Reasons Investors Choose Mutual Funds | Mutual funds have grown in importance in Canada over the last twenty-five years. As of February 2008, there were 2,038 mutual funds with a total worth of nearly $679 billion – up from only $3.5 billion in 1981.The two major reasons investors choose mutual funds are: 1. Professional management - although there is no guarantee that the fund will outperform the market. 2. Diversification - by asset class (i.e. by holding a mix of stocks, bonds and money market investments) or within each asset class (i.e. by holding a variety of securities within each class). The risk of mutual funds arises from the risks associated with the investments they hold. * For example, a bond fund will be subject to interest rate risk – as interest rates rise, the value of the bonds owned by the fund will decline. | Mutual Funds With and Without Loads A load is a sales commission. In a load fund, the investor pays a commission every time he or she buys units (front-end load)...
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...over all the states in United States and Puerto Rico. Currently we have two stores in all the fifty-states across the nation and one in Puerto Rico. Use of Estimates Our financial statements are prepared to meet all the requirements in accordance with the Generally Accepted Accounting Principles in the United States (U.S. GAAP). One of the requirements is to make estimates and assumption that affect the amounts reported in the Consolidated Financial Statements. All the estimates are taken in consideration from the accounting department best knowledge for active assets and actions of the company in the future. The accounting department estimates for pensions, postemployment benefits, valuation to get intangible assets, consumer and trade promotion accruals, deferred tax assets. Property, Plant, and Equipment All property, plant, and equipment are stated at cost and depreciated over their useful live. All depreciation expenses incurred are derived using the straight line method. We do not depreciate the land. The company estimates the useful live for our assets accordingly; buildings have a 30 years live, computer and equipment has a 5 years live, and the repair equipment a 15 years live. We reviewed our assets periodically to decide if any impairment is present so the useful live and depreciation can be adjusted for accuracy. Short-term inventory All of the company investment is comprised of trading securities, comprised of debt...
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...UK INSURANCE KEY FACTS 2014 UK Insurance KEY FACTS 2014 abi.org.uk 3 @BritishInsurers Follow us on Twitter @BritishInsurers ASSOCIATION OF BRITISH INSURERS About the ABI The Association of British Insurers is the voice of the UK insurance industry, representing general insurance and longterm savings and life insurance. The ABI has over 250 members, who account for around 90% of UK insurance premiums. www.abi.org.uk – has all the latest news, views and key information about insurance and the ABI’s work on behalf of the industry. The ABI produces detailed statistics on the industry, which are free to members and can be purchased by others for a fee. Contents 1 Introduction 2 The insurance industry is a UK success story 4 General insurance and its customers 10 Long-term savings and life insurance and its customers 15 Insurers play an important role as investors in the economy 16 Glossary 17 Contacts at the ABI abi.org.uk 4 UK INSURANCE KEY FACTS 2014 The UK insurance industry is the largest in Europe and the third largest in the world. It plays an essential part in the UK’s economic strength, managing investments of £1.8 trillion (equivalent to 25% of the UK’s total net worth) and paying nearly £12bn in taxes to the Government. It employs around 315,000 individuals, of which more than a third are employed directly by insurers with the remainder in auxiliary services such as broking. On behalf...
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...causes a temporary difference between taxable and pretax accounting income? 2. (TCO 1) Which difference between financial accounting and tax accounting ordinarily creates a deferred tax liability? 3. (TCO 1) Which temporary difference ordinarily creates a deferred tax asset? 4. (TCO 1) Under current tax law, a net operating loss may be carried forward up to 5. (TCO 1) Which causes a permanent difference between taxable income and pretax accounting income? ACCT 312 Week 2 Quiz 1. (TCO 2) Which causes a temporary difference between taxable and pretax accounting income? 2. (TCO 2) Which statement typifies defined contribution plans? 3. (TCO 2) Which is not a way of measuring the pension obligation? 4. (TCO 2) The PBO is increased by 5. (TCO 3) Our company has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, $220,000; benefits paid to retirees, $20,000; interest cost, $14,400. The discount rate applied by the actuary was 8%. Which...
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... 28/12/2014 Extension Granted to _________________________________________________ Financial plan for Mark Lewis Prepared by Date 28 December 2014 Checklist before submission 1 Declaration by the candidate named above 2 Introduction: 8 About you 8 Current situation: 8 Personal aims: 9 Base plan 10 Assets and liabilities 11 Assets 11 Liabilities distribution： 12 Income & Expenditure 13 Food expenditure 14 Clothes 14 Rental 15 Others 15 Investment and portfolio: 16 You want to know: 16 Current situation 17 General 18 Gilts 18 Funds 19 Emergency fund 19 Stocks & shares ISAs 20 Pension 20 Income protection 21 Property 22 Start Plan 23 Conclusion 24 Appendix 26 References 30 Introduction: According to the information you provide, that seems like a financial plan is essential in order to achieve your goals in the future life. In this financial plan, we will make you clearly know what you have (Assets) and what you owe to...
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...Introduction The report presents a case about AMB, which is a leading pension real estate advisory firm that has recently proposed to turn itself into a publicly traded Real Estate Investment Trust (REITs) and is planning to persuade its client to contribute their real estate assets to create a new REIT. Furthermore, the report also includes considerations of Anne Shea, who is the Assistant Vice President at Curator’s Fund; which is considering exchanging her shares in the commingled fund for the shares in the REIT. Real Estate Investment Trust (REITs) Real Estate Investment Trust (REITs) invests in and own properties by offering investors a highly liquid method of investing in high-density markets. Most REITs earn their revenue from property rent and leases. In order to boost real estate investments, REIT receives special tax consideration for investing in highly liquid market i.e. if more than 75% of their profits are generated through rents from real estate property and they distribute at least 90% of their current period profits as dividend to shareholders, then the trust will not be subjected to corporate tax. Advantages and Disadvantages of Public Real Estate The advantages of a REIT are as follows: a) Liquidity: Public REITs are more liquidate as compared to private REITs. Public REIT shareholders can easily exchange their shares in the stock exchange. b) Low sales commission: Brokers charge low sales commission on public REITs as compared to private REITs, which...
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