7/31/2019 ACCA F6 - Trading Profit Adjustment

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Review: Fahim Rehan Khan, Prepare by: Iftekhar IFTE,ifteinfo@gmail.com

Trading Profit AdjustmentIndividual & Companies

Net Profit per account/ Operating Profit/ (loss) x/(x)

Add:

Depreciation x

Amortization x

Entertaining Clients/Customers/Suppliers xGift to Customer(Note:1) x

Gift aid Donation (Note:2) x

Donation to a Political Party x

Donation to a National Charity xDonation to a National Charity under gift aid scheme (Note: 3) x

Repair & Renewals (if capital in nature) x

Motor Expense (only private use portion) xCar Lease (Note:4) x

Telephone (only private use portion) x

Parking Fines [without employee parking (allowable) fines] x

Health and Safety Fines x

Golf Club membership x

Health Club Subscription x

Legal fees (Capital in nature) x

Legal fees in connection with the Issue of Share x

Legal fees in connection with the Court action x

Legal fees in connection with a grant of a new lease x

Legal fees in connection with the Purchase of the Shop x

Fees for Planning Permission x

Personal Tax advise x

Capital Gain Tax work x

Accommodation (only private use portion) x

Light & Heat (only private use portion) xAny Capital Expenditure (Note:5) x

Building Extension to enlarge office/shop/work space x

Written - off Trade debts x

Written - off of Loan to customers x

Impaired debts Written - off (non trade purpose) x

Non trading interest payables x

Own Consumption (Note:6) x

Excessive Salary/Remuneration paid to Family x

Decorating Private Flat x

Drawing of the Proprietor x

Allowance for trade debtors x

xx

Less:

Capital Allowance (Plant and machinery, IBA) x

Private Telephone (portion of Business use) x

Any Private Assets (portion of Business use) x

Use of Office (portion of Business use) x

Rent paid for Business (Business purpose) x

7/31/2019 ACCA F6 - Trading Profit Adjustment

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Review: Fahim Rehan Khan, Prepare by: Iftekhar IFTE,ifteinfo@gmail.com

Non trading Interest received x

Income from investment x

Building Society Interest (BSI) received x

UK dividend/dividend received x

Debenture Interest received x

Bank Interest received x

Loan Interest received (non trading) x

Patent Royalties (if not mentioned in the Extracted Income Statement) xProfit on Sale of capital assets (industrial building, office building etc.) x

Pre- trading expenditure for trading x

Market Research xx

(x)

Tax adjusted Trading Profit XX

Note: 1Gift to customer are only allowable if:

Cost less then 50 per recipient per year Gift is not food, drink, tobacco or vouchers exchangeable for goods

Gift carries a conspicuous advertisement of the business

Note: 2The Gift aid donation is deducted in the corporation tax computation from total profits and istherefore added back in calculating trading profits.

Note: 3 Local Charity:

If small amount of donation Benefit received from charity should be less then lower off: 25% of

Donation or 25 National Charity:

Under Gift Aid Scheme: (not deductable) First, added back Second, Less from Pro Forma of Corporation tax computation

Normal Gift to National Charity: First, added back Not deducted from Pro Forma

Note: 4Car lease: If CO2 emission rate >160g/km then add: 15% x lease costs.

Note: 5If plant & machinery adjust for Capital Allowance

Note: 6Selling price not paid = AddIf paid, selling price less Amount paid = Add