10-01-2009, 09:38 PM
Dear,
If it is society as certified as NPO then it would be exempt from income tax. If the society has not been certified as NPO then disputes would surely arise with tax authorities.
NO accounting standard require to write back the old liabilities and off course the IFRS (i think in your case) would be applicable to the society because apparently society would fall in the framework of medium sized entities or small sized entities.
Socities are not required to show their performance to their members in term of net profit or EPS as the primary purpose of society is the welfare.
In this situation, it is recemmended not to write back the old liabilies without getting confirmation from the concerned creditors (also if creditors are related party). Write back of liabilites will understate the liabilities of the society which should not be.
It is my understanding, you are the auditors and may do as you people think best.
Regards,
*
If it is society as certified as NPO then it would be exempt from income tax. If the society has not been certified as NPO then disputes would surely arise with tax authorities.
NO accounting standard require to write back the old liabilities and off course the IFRS (i think in your case) would be applicable to the society because apparently society would fall in the framework of medium sized entities or small sized entities.
Socities are not required to show their performance to their members in term of net profit or EPS as the primary purpose of society is the welfare.
In this situation, it is recemmended not to write back the old liabilies without getting confirmation from the concerned creditors (also if creditors are related party). Write back of liabilites will understate the liabilities of the society which should not be.
It is my understanding, you are the auditors and may do as you people think best.
Regards,
*
