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Trade (Section 11) - Coggle Diagram

- - - - Losses are involuntary expenses
      - Expenses are voluntary money payments
    - - Losses refer to losses of Floating capital
      - Losses aren't cash only; can be cash or another ascertainable amt
  - - - Payments contigent on future events only incurred when the event transpires
    - - Expenses only deductible once there's an unconditional legal obligation
    - - Amounts to be settled as a result of a dispute only incurred once the dispute is settled
  - - - Must be deducted in the year of assessment in which was incurred
      - Cant be claimed in Later yeras
  - - - What is the purpose of the expense?
      - Is the purpose closely related to Income production?
    - - If something is not an inevitable part of the business, it's not deductible
    - - Expenditure as part of service package are deductible
      - Expenditure in order to induce and keep employees into employment are deductible
    - - Trading and audit fees are in the production of income and deductible
      - Expenses incurred for dual purposes are apportiones
  - - - cost of income earning operation is revenue in nature/deductible
      - cost of improving /adding to the income earning structure is capital in natre.
    - - Cost to create a capital structure = Capital
      - Cost to work the capital structure = Revenue