CH 24 - Tax provisions Flashcards
1
Q
What leading case preceeded that HMRC would only accept a provision if it had been specifically calculated?
A
Following Southern Railway of Peru Ltd
2
Q
What 4 criteria entity must prove for HMRC to accept provisions as deductible?
A
a provision must (as per HMRC):
1. relate to allowable revenue expenditure;
2. comply with (GAAP);
3. not conflict with statute or case law; and
4. be estimated with sufficient accuracy.
3
Q
When provision will be only allowed under GAAP?
A
Under GAAP, a provision will only be allowed if:
* there is a present obligation resulting from a past event;
* a transfer of economic benefits will be required to meet this obligation; and
* a reliable estimate can be made.
