IAS – 16 (Property, plant & equipment):

Definition: Tangible assets held for more than 12 months for use in a business ·         Recognition: *   Probable future economic benefits will flow to the entity *  Cost of the asset can be measured reliably ·         Initial recognition: at cost, which includes – *  All capital costs involved to bring the asset in working conditions *  E.g. site preparation cost, installation & delivery cost, borrowing cost, dismantling cost       Subsequent expenditure: *  Can only be capitalized if total economic benefits increase above those expected on original recognition *  Otherwise, it should be recognized in SOPL (i.e. I/S) as it only maintains the economic benefit originally expected Depreciation: *  Systematic allocation of an asset’s cost over its useful life *  It should be charged from the date the asset is available for use *  Straight line method = (Cost – residual value)/ useful life *  Reducing balance method = (Net book value X certain %) Measurement: *  Cost Model = (Cost – Accumulated Depreciation) – Impairment loss *  Revaluation model: *  Revaluation at start of year: *  NBV at year end = (Revalued amount – Depreciation based on revalued amount over its remaining life) *  Revaluation increase/decrease = Revalued amount – Opening NBV *  Revaluation at end of year: *  NBV at year end = Revalued amount *  Revaluation increase/decrease = Revalued amount – Closing NBV  Journal of revaluation:   Non-current Asset (New value – Cost)                        DR    Accumulated Depreciation (up to date)                       DR   Revaluation reserve (OCI)                                                CR                                                        *  Excess depreciation on revaluation gain transferred to R/E:   Revaluation reserve                                                     DR   Retained earnings                                                             CR                                            *  Revision of useful lives:   Depreciation = NBV at date of change/ Revised life *  Addition of NCA during the year:   Depreciation = (NBV + Addition)/ Remaining life *  Revision of residual value: *  Depreciation =(NBV up to revision - New residual value)/ Remaining life   *  Journal of disposal:       Cash/ bank (sales proceeds) DR   Accumulated Depreciation (up to date) DR   * Loss on disposal (B)   NCA (at cost) DR   CR   * Gain on disposal (B)   CR

Income from House Property u/s 24-25

 

How does the VAT Chain Work?

 

VDS head and rate as per Finance Act. 2021-2022

 

Calculation of net Bill amount in the case of Excluding TDS & VAT

 

Excluding TDS & VAT or net payment,

Suppose, ABCD Co Ltd. has a contract with vendor to pay BDT 100 (net) and if any TDS and VDS is applicable that ABCD will need to bear extra over and above 100. Considering 15% VDS and 10% TDS is applicable in this transaction. How value of VDS and TDS will be calculated?

Answer: If net payment = BDT 100.00 Then it is 90% of the base value or Income as TDS rate is 10% Base value would be = 100*100/90 = BDT 111.11

Therefore, TDS amount of BDT (111.11-100) = BDT 11.11

And VAT amount would be 15% on BDT = BDT 111.11, VAT=111.11*15%=BDT 16.67

As per new VAT Act 2012, Price should be inclusive of VAT amount

Calculation Base Value in the case of Including TDS & VAT

 

WE ASSUME TAX RATE IS 10% AND VAT RATE IS 15%.

Including TDS & VAT

If the invoice value of vendor is Tk. 5000 including VAT @ 15%, submitted for the payment to resident;

Then VAT would be = BDT (5,000 – 5,000 * 100/115)=BDT 652, Tax Deduction at Source (TDS) BDT(5,000 – 652) * 10% = BDT 4,348 @10% = 435

Here base value = BDT 4,348

Various types of Business related Acts

 

S.L	Particulars	ACT
1	Partnership Act	1932
2	Joint Stock Company	1994
3	Co-Operative Society Act	2010
4	Negotiable Instrument Act	1981
5	Income Tax Act	1984
6	Income tax Ordinance	1984
7	The Value Added Tax and Supplementary Duty Act,	2012
8	Bank Company Act	1991
9	Security and Exchange Commission act	1993
10	Security and Exchange commission Ordinance	1987
11	Labor Act	2006
12	Sale of goods Act	1930
13	Chartered Accountant ordinance	1972
14	The Societies Registration Act	1860.
15	The Trade Organization Ordinance	1961.
16	The Contract Act	1872.
17	The Bankruptcy Act	1997
18	Bangladesh Bank Order	1972 (P.O. No. 127 of 1972)
19	Bank Company (amendment) Act	2013
20	The Bankers’ Book Evidence Act	1891
21	Foreign Exchange Regulations (Amendment) Act	2015
22	Foreign Exchange Regulations Act	1947
23	Financial Reporting Act	2015
24	Bank Deposit Insurance Act	2000
25	Money Loan Court Act	2003
26	Micro Credit Regulatory Authority Act	2006
27	Money Laundering Prevention (Amendment) Act	2015
28	Money Laundering Prevention Act	2012
29	Anti Terrorism (Amendment) Act	2013
30