Hi guys, I am Seb, currently studying bookkeeping and accounts.
I have been a regular visitor to this site for quite a while. Very pleasant and helpful are you all :)
I wonder, if maybe you could possibly shine some light for me, I'd be most grateful.
The search feature I have used, but to no avail!
Anyhow.....
Written down allowances,
Now, I have these figured, regarding where and when they can be used, etc etc, my question, is rather more basic.
Where is this information stored? After a SA return has been submitted? It's not an accounting concept, so will obviously not be kept in the 'books' ??
If one is using an accounting program, would this calculation be saved and automatically b/f the next time a SA tax return is commenced?
Suppose, if a complete manual bookkeeping set up was being used, would this be placed in a notes section of the clients file? To be referred to next time a return is due?
It's no doubt a ridiculous question to ask, but I can not find it in my SA manual.
Disallowed expenses etc, and depreciation, would these figures and calculations be kept somewhere similar? With the new adjusted profits kept safe? I understand that adjusted profits is a tax concept and not an accounting one? So, SoPL nor SoFP are effected?
Thank you.
I apologise for the most basic of questions
Regards
-- Edited by seblewis on Sunday 13th of October 2013 11:13:56 PM
It all really depends on the software that you are using as to what it can do for you.
I tend to have a multi workbook Excel spreadsheet for each client that holds details additional to the accounts software (My accounts and bookkeeping packages are VT Accounts and Transaction+). This spreadsheet will hold things such as the tax situation for a client and how the depreciation was calculated plus general calculations and projections, Customer Relationship Management information, etc. (The client has no right of access to this file).
For the depreciation itself I will enter all depreciation for an asset at the same time that I enter the asset itself.
The software only takes into account matters occuring up to a specific date so future depreciation (or anything else for that matter) whilst already stored in the system so not forgotten is not considered when extracting the data from the bookkeeping software into the accounts package.
Software such as Taxcalc would save capital allowances information between periods but for VT accounts I need to enter figures manually where applicable (with many small businesses though AIA combined with it being more beneficial to own cars privately means there is seldom very much to worry about as far as brought forwards allowances are concerned).
As mentioned above, that is not the case for depreciation but you should find that your software will be able to take care of that for you.
For your calcualtions you don't actually keep the adjusted profit between periods but rather recalculate from the accounting profit by adjusting out the non allowables.
The only line in your note that I think that you may have miswritten or as its late I may have misunderstood is the last line where it mentions depreciation and whether this is kept safe.
For already applied depreciation its in the safest of all places.
The depreciation for the current period is in the P&L so is included in the profit or loss for the period, the accumulated depreciation is in the notes to the balance sheet.
I assume what you mean was where is the unallocated future depreciation kept? In which case I think that it's covered by the above answer (calculation held in a speadsheet, stored transactions stored ready to be actioned in the accounts package).
Hope that the above makes sense but if not just say and I'll review / fix my reply in the morning.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi there, Thank you for your reply.
Regarding the depreciation, I am meaning along the lines of..
We have net profit from accounting but to get profit for tax calculations, some expenses and depreciation get added back, to gain adjusted profits.
Now, this calculation, is there a need to keep this filed? Or, once depreciation has been added back, so to speak, can it be discarded?
I understand once the SoPL and SoFP have been completed, this is the end of the accounting concept, and the tax concept can begin, and adjusted profits is a tax concept, not accounting, so depreciation isn't affected. In an accounting concept anyway.
Thank you :)
Also, sorry...
I then imagine, the importance of obtaining a client's previous accounts to find, for example WDA pools etc.
Would these be printed for example as a side so to speak? Along with financial statements, from a past advisor? For calculations to be drawn from?
Thank you
we never discard anything. Everything is always kept. Every filing, every calculation for a client. All that I was saying there is that from one period to the next the adjusted figure is based on the accounting profit or loss from that year and adjustments applied to get to the new adjusted figure.
The prior years figure is not required for the calculation.
You do however need brought forwards captial allowance calculations and as you identify there you have an issue in that the ONLY transfer information that the incumbant practitioner is obliged to give you is a full set of accounts (not abreviated) signed by the client and the trial balance upon which that was based.
The new accountant has no right at all to their tax calculations or data files or permanent file, etc.
You neeed to view the clients previously filed tax returns and to a certain extent much of the client file can be rebuilt from available information but life would be so much easier if you had access to the original calculations... Which the previous accountants MAY let one see for a fee.
Thats not so much of a problem with larger firms as they (in my experience although this may not be others experience) tend to be a lot more accomodating with information on the basis that we lost one to you this week, next week you may lose one to us.
Very much an I scratch your back you scratch mine sort of arrangement.
For smaller firms though or for those that for some reason they do not regard as accountants some firms can play the rules and give only the information that they are required to by their professional body and even that is given begrudgingly.
But, if you are (for example) chartered and they are chartered generally they tend to be more accomodating.
Without that though its old tax returns, a trial balance and recalculating the workings yourself.
kind regards,
Shaun.
-- Edited by Shamus on Monday 14th of October 2013 08:47:11 AM
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
