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General deduction - Coggle Diagram
General deduction
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Actually incurred
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Principles
If payment is contingent upon the happening of a uncertain future event the payment can only be incurred once the condition is met
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Dual purpose
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Principles
Incurring audit fees is necessarily attached to the performace of taxpayer's income earning operations i.e Audit fees are incurred in the production of income
If a dividend stripping scheme is evident, you must portion the shares.
(Taxation / Total distribution amount * cost amount)
Not of a capital nature
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Principles
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The legal categorisation of payment does not determine whether the amount is capital or revenue but rather the purpose of the expenditure. Was there an enduring benefit created?
cost incurred to create capital structure = Capital
cost incurred to work the capital structure = Revenue
Repairs
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Principles
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Repair is restoration. Restoration can either be by replacement or renewal of parts of the whole
Improving is the create a better asset