Free Essay

Capital Allowance

In: Business and Management

Submitted By crawky7654
Words 2698
Pages 11
IRAS CIRCULAR

Writing-Down Allowance on Payments for Indefeasible Rights of Use (IRUs)
(1st Edition, Revised)

Published by Inland Revenue Authority of Singapore Published on 07 Oct 2003 © Inland Revenue Authority of Singapore All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording without the written permission of the copyright holder, application for which should be addressed to the publisher. Such written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature.

1 1.1

Introduction On 28 February 2003, DPM and Minister for Finance announced in the 2003 Budget Speech that a deduction for writing-down allowance (WDA) will be granted on expenditure incurred for the purchase of Indefeasible Rights of Use (IRUs) over the number of years for which the IRU is acquired. This is to encourage telecommunication carriers to hub their networks in Singapore. The WDA is effective from the Year of Assessment (YA) 2004. An “Indefeasible Right of Use” or “IRU” refers to an indefeasible right to use an international telecommunications submarine cable system1. An international telecommunications submarine cable system is often built and owned by a few parties, commonly known as a consortium of members (referred to as “the grantors”). The grantors may grant the right to use international telecommunications submarine cable system through an IRU agreement or arrangement, to a third party (a nonconsortium member, referred to as the “purchaser”) for the purpose of acquiring bandwidth capacity. The rights are usually granted for a period of 10 to 25 years, often with an up-front lump sum payment. Generally, an IRU agreement confers usage rights on the purchaser and the grantor retains the ownership of the facility. The purchaser of an IRU receives an allocation of a cable’s total capacity, expressed in bandwidth, over which voice and data communications could be transmitted. The purchaser may be required to pay for operations and maintenance services. Depending on the terms of contract, the IRU purchaser may also be required to bear some of the decommissioning costs of the submarine cable system. The purpose of this Circular is to elaborate on the details of the WDA on payments for IRUs.

1.2

1.3

1.4

1.5

1

“international telecommunications submarine cable system” means an international submarine cable that is laid in the sea and includes its cable landing station and any other equipment ancillary to the submarine cable system.

2 2.1

Current Tax Treatment As mentioned in paragraph 1.3, an international telecommunications submarine cable system is often built and owned a consortium of members (i.e. the grantors of IRUs). The expenditure incurred by the consortium members to develop and build the submarine cable system is capital expenditure for the provision of plant. As such, the consortium members are eligible to claim for capital allowances under section 19 or 19A of the Singapore Income Tax Act (SITA). On the other hand, the purchasers of the IRUs are not able to claim deduction on the payments they made for the purchase of the IRUs. The payments are capital expenditure as they are payments for a right, and hence not tax deductible. The payments also do not come with rights of ownership but only rights to use the capacity. They are therefore not equivalent to payments for the acquisition of plant or machinery. Under the existing provisions of SITA, such payments do not qualify for any capital allowances. In view of the above, telecommunication companies, which acquire the necessary bandwidth capacity via IRUs, may not be able to claim any expenses for tax purposes compared to those who build their own submarine cable system. Details of the Tax Change and Expenditure Qualifying for WDA To encourage telecommunications operators to provide international connectivity, expenditure incurred for the acquisition of an IRU for the purposes of a person’s trade, business or profession, can qualify for WDA over the number of years for which the IRU is acquired. This change will take effect from YA 2004. Payments for IRUs made under agreements or arrangements prior to YA 2004 will not qualify for WDA. IRU payments often include an up-front capital payment and periodic amounts for the operation and maintenance of the cable system. The up-front capital payment (excluding legal

2.2

2.3

3 3.1

3.2

fees, registration fees, stamp duty and other cost related to the acquisition of any IRU) qualifies as capital expenditure for WDA over the number of years for which the IRU is acquired. The periodic amounts for operation and maintenance of the cable system are generally revenue expenditure that qualifies for tax deduction in the same year they are incurred. 4 4.1 How to Calculate WDA on IRU Payments For a person2 who has incurred capital expenditure on the purchase of an IRU for the use of his trade, business or profession, he can start claiming WDA from the YA relating to the basis period in which he incurred such expenditure, provided that the submarine cable system is in use. Where the expenditure is incurred before the commencement of his trade, business or profession, the expenditure shall be treated as if he had incurred it on the first day he commences his trade, business or profession. The person can claim an amount of WDA equal to the capital expenditure incurred on the purchase of IRU over the number of years for which the IRU is purchased as long as he continues to hold the IRU. However, in the year that the WDA is claimed, the submarine cable system must be in use as at the end of the basis period for the YA concerned. The formula for calculating WDA for each YA can be expressed as follows: WDA = A/B Where A is the amount of capital expenditure incurred on the purchase of IRU; and B is the number of years for which the IRU is purchased 4.3 Where WDA has been made to the person previously, a balancing allowance or balancing charge will be determined for the YA relating to the basis period in which any of the following events occurs:

4.2

2

“person” includes company, sole proprietors and partners.

i. Where the IRU comes to an end without subsequent renewal (such as when the underlying facilities experience terminal failure); ii. Where the person permanently ceases to carry on the trade, business or profession; iii. Where the person sells, transfers or assigns all the IRU or so much of it as he still owns; or iv. Where the person sells, transfers or assigns part of the IRU and the amount or value of any consideration less any decommissioning cost (hereinafter referred to as consideration) is not less than the amount of capital expenditure remaining unallowed. In such instances, no WDA will be made to the person for the YA concerned.

5 5.1

Balancing Allowance (BA) If an IRU comes to an end without subsequent renewal or the trade, business or profession permanently ceases and there is no consideration of the IRU, a BA of an amount equal to the capital expenditure remaining unallowed will be given to the person for the YA relating to the basis year in which the event takes place. If the person sells, transfers or assigns all the IRU that he owns and the consideration is less than the capital allowance unallowed, the BA will be determined by the excess of the amount of capital allowance unallowed over the consideration. BA will be granted for the YA relating to the basis year in which the sale, transfer or assignment takes place. In the case where a person sells, transfers or assigns any part or all of the IRU he owns at a price lower than the open market value (OMV), the OMV will be used to compute the BA.

5.2

5.3

6 6.1

Balancing Charge (BC) Under a sale, transfer or assignment of all or any part of IRU, if the amount of consideration exceeds the amount of capital expenditure unallowed, a BC will be determined and deemed as income for the YA relating to the basis period in which the sale, assignment or transfer takes place. The BC is determined as the excess of the consideration over the capital expenditure unallowed (if any). Similar to the case in Paragraph 5.3, where a person sells, transfers or assigns any part or all of the IRU he owns at a price lower than the open market value (OMV), the OMV will be used to compute the BC.

6.2 6.3

7 7.1

Deferment of WDA A person may also choose to defer the WDA for any of the YAs relating to the basis year falling within the number of years for which the IRU is acquired. However, the number of years for which the WDA is allowed is limited to the period for which the IRU is acquired. BA may be computed at the end of the period for which the IRU is acquired.

8 8.1

Computation of BA/BC for Partial Sale or Transfer of IRU Where in the case of a transfer, if the consideration of part of the IRU owned are less than the capital expenditure unallowed for the IRU, the amount of WDA for the YA relating to the basis period for which the event takes place and subsequent YAs will be determined as follows: C–D E Where C is the amount of the capital expenditure remaining unallowed at the time of the sale, transfer or assignment of IRU;

D is the amount of the consideration of that part of IRU; and E is the number of complete years of the writingdown period remaining at the beginning of the YA relating to the basis period in which the sale, transfer or assignment of the IRU occurs. Some examples of how to compute WDA, deferment of WDA, BA and BC for the transfer of IRU or a partial transfer of the IRU are shown in Annex 1 of this Circular.

9 Sale or Transfer of IRU between Related Parties 9.1 In the case of a sale or transfer of an IRU between two related parties, where the buyer and seller are under common control, or where one has control over the other, the buyer and seller can elect under Section 24 of the SITA to have the actual price (at which the IRU is transferred between them) to be substituted by the capital expenditure remaining unallowed in respect of that IRU. Upon such election, no BA or BC would arise to the seller, and WDA shall continue to be available to the buyer as if no sale had taken place.

10

Questions and Answers

10.1 What is the tax treatment for the purchase of ownership interest in an international telecommunications submarine cable system?
When a person acquires ownership interest in an international telecommunications submarine cable system, the person becomes the legal owner of the property. The international telecommunications submarine cable system is treated as a plant owned by the person and thus qualifies for capital allowances under Section 19 or 19A of the SITA.

10.2 What is the tax treatment for services which may be provided under the IRU contracts?
It is common for the telecommunication submarine cable system operator to provide services such as status reports on network performance and other services which are incidental to the grant of the IRU. Where such services are provided at no extra costs to the IRU purchaser, the entire payment made to the non-resident person (not carrying on a business, trade or profession in Singapore) may be treated as payment for IRU and exempt from tax. However, if services are separately contracted for, and the services provided are not incidental to the grant of the IRU, the payments relating to the provision of services must be identified and subject to withholding tax at the prevailing corporate tax rate if they are rendered in Singapore and made to a non-resident vendor.

10.3 What is the rationale for the tax changes?
The change will align us with other communications hubs in the region and ensure that Singapore remains an attractive location for telecommunication carriers to hub their network from Singapore. Telecommunication services are critical to all businesses in Singapore, especially so for Singapore’s infocommunications industry. A significant portion of the costs of many telecommunication carriers is associated with the acquisition of international connectivity, primarily on submarine cable systems. If you have any queries, please do not hesitate to email us at iras@iras.gov.sg or write to us at the following address : Comptroller of Income Tax (Electronic Commerce) 55 Newton Road Revenue House Singapore 307987

Annex 1

Examples: How WDA is calculated:
Company TelecomABC bought an IRU for a period of 15 years for $1.5million on 01.05.2003.
Telecom ABC will be able to claim WDA as follows:

WDA with effect from YA 2004 = $1,500,000/15 = $ 100,000 TelecomABC will thus be entitled to claim $100,000 for each YA from YA2004 to YA2018.

For deferment of WDA claim:
Alternatively, if Company TelecomABC decides to defer WDA claim for YA2004, YA 2007 and 2008, the WDA will be computed as follows: Table 1:
Year Year of Assessment 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 WDA claimed $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 Remaining Capital Expenditure Unallowed 1,500,000 1,400,000 1,300,000 1,300,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 Balancing Allowance N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. $400,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Annex 1

How to Compute BA/BC:
(All scenarios make reference to information in Table 1 above) Scenario A

If Telecom ABC permanently ceases business (assuming there is no transfer or sale) in year 2010 (YA2011), then a BA will be computed as follows:
Balancing Allowance (BA) for YA2011 = Remaining Capital Expenditure on IRU unallowed as at 31.12.2009 = $1.1million Scenario B

If TelecomABC transfers the IRU in year 2010 (YA2011) and the consideration is $0.6million, which is less than the capital expenditure remaining unallowed, a BA will be computed as follows:
Balancing Allowance (BA) for YA2011 =(Remaining Capital Expenditure on IRU unallowed as at 31.12.2009) - (Consideration) = $1.1million - $0.6million = $0.5million Scenario C

Supposing TelecomABC transfer the IRU in year 2010 (YA2011) and the consideration is $1.3million which is more than the capital expenditure remaining unallowed, a BC will be computed as follows:
Balancing Charge (BC) for YA2011 = (Consideration) - (Capital Expenditure on IRU remaining unallowed as at 31.12.2009) = $1.3million - $1.1million = $0.2million No WDA for YA2011 onwards as there is no capital expenditure unallowed w.e.f 31.12.10.

Annex 1 Scenario D

However, if only part of the IRU is transferred by TelecomABC in the year 2010 (YA2011), the WDA available to Telecom ABC with effect from YA2011 will be adjusted and computed as follows:
Capital expenditure remaining unallowed as at 31.12.2009 Consideration of part of IRU Number of complete years of the writing-down period3 remaining at the beginning of the YA in which the transfer takes place WDA for YA2011 to YA2018 = ($1.1 million - $0.65 million) / 8 = $56,250 per YA $1.1 mil $0.65 mil

8 years

3

“writing-down period” in respect of an IRU is the number of years for which the IRU is acquired commencing with the year of assessment relating to the basis period in which the capital expenditure for the acquisition of the IRU is incurred.…...

Similar Documents

Premium Essay

Polluter Corp. Emission Allowance

...Background: An emission allowance is an authorization by a permitting authority or the Environmental Protection Agency Administrator to emit a specified amount of pollutant during a specified period of time. (http://www.ferc.gov/help/faqs/form-580.asp#question4) Case Summary: Polluter Corp. is a company features in manufacturing household cleaning products. The government allocated the emission allowances (EAs) for each year. According to the Federal Energy Regulatory Commission accounting guidance for EAs, the EAs is recorded as intangible asssets. The Polluter Corp. is going to upgrade its facilities in 2014 in order to decrease the amount of greenhouse gas emitted. However, the corporation still needs additional EAs before upgrades. Hence, the Company spent $3 million to purchase EAs with a vintage year of 2012 from Clean Air Corp. In order to compensate the cost, the Corp sold EAs worthy of $2 million with the vintage year of 2016 to Dirty Chemical Corp. We need to analyze the classification of the statement of cash flows for these two transactions. In addition, we need to differentiate the method of recording these two transactions according to IFRS and U.S. GAAP. Case Analysis: In terms of classification, emission allowances satisfy the definition of an intangible asset. Specifically, they are assets (not including financial assets) that lack physical substance. [FASB, Appendix F, Glossary to SFAS 142, Goodwill and Other Intangible Assets]. Although they......

Words: 681 - Pages: 3

Premium Essay

Emission Allowances and the Related Accounting Issues

...Emission allowances and the related accounting issues Laura Chilian April 5, 2012 For many years, the Securities and Exchange Commission (SEC), and the International Financial Reporting Standards (IFRS), tried to establish a proper accounting treatment for emission allowances. The mechanism for these credits is based on a simple ‘cap and trade’ idea. The government issues a number of credits to each company based on the amount of greenhouse gases emitted. Issuing a lower number of credits than needed creates scarcity, which makes trade possible. Companies that emit more gases than they were allowed will pay a fine or buy more credits. Situations are reversed if companies use less credits than they should have. This creates a market-based system on an international level (“Emission Trading Schemes” 2). The first accounting conflict arises from the nature of these allowances. They could be considered assets held for use, grants from the government for the value of the allowances, or a liability/promise to deliver allowances equal to the emissions that have been made. Considering this, emission allowances can not be categorized as either net assets or net liabilities. Due to the lack of authority, accounting practitioners create diversity (“Emission Trading Schemes” 5). Two models or treatments are developed to account for these rights. 1) The inventory model: when...

Words: 1173 - Pages: 5

Premium Essay

Crisis of Capital

...c o r p o r a t e f i n a n c e DECEMBER 2008 Why the crisis hasn’t shaken the cost of capital The cost of capital hasn’t increased so far in the downturn—and didn’t in past recessions. Richard Dobbs, Bin Jiang, and Timothy M. Koller The cost of capital for companies reflects the attitudes of investors toward risk—specifically, the reward they expect for taking risks. If they become more averse to risk, companies have difficulty raising capital and may need to cancel or defer some investments or to forgo some mergers and acquisitions. So it’s understandable that the current financial crisis has many executives concerned about what the price of risk—the cost of capital—will mean for their strategic decisions in the near term. Yet our analysis finds no evidence that the long-term price of risk has increased over its historical levels—even though short-term capital is difficult to obtain. Anyone with a longer-term view won’t find this surprising. At the peak of the tech bubble of 2000, when the media were awash with suggestions that the cost of capital had permanently declined, a deeper analysis suggested that it was remarkably stable—and has been for the past 40 years.1 Obviously, for companies that are concerned about survival and having difficulty raising capital, its cost is clearly irrelevant. We realize some companies just don’t have access to new capital, period. Yet for companies that have more of it than they need to survive—either from internally......

Words: 1462 - Pages: 6

Premium Essay

Capital

...your own group of three or four students. In your write-up please answer the following questions: 1. Does Pioneer estimate its overall corporate weighed average cost of capital correctly? If not, re-estimate the WACC (showing and/or explaining your calculations). 2. Should Pioneer use a single corporate cost of capital or multiple divisional hurdle rates in evaluating projects and allocating investment funds among divisions? Why or why not? If multiple rates are used, how should they be determined? 3. How should Pioneer set capital budgeting criteria for different projects within the same division? What distinctions among projects might be captured in these criteria? How should these different standards be determined? XIII. Capital Budgeting Process Report In this assignment, your group is required to select a firm and identify an individual within the firm with a good understanding of the firm’s capital budgeting process, and interview this individual to learn as much as possible about the capital budgeting process. You may choose a firm where you are already employed provided that you are not already knowledgeable the capital budgeting process in your firm. You should not choose start-up firms because these firms have not had the opportunity or the experience to develop a sound capital budgeting process. Firms that are unwilling to provide the necessary information because of concerns of releasing confidential information should also be avoided. You......

Words: 1416 - Pages: 6

Premium Essay

Working Capital

...of debt (payable within 12 months) is critical, because it represents a short-term claim to current assets and is often secured by long term assets. Common types of short-term debt are bank loans and lines of credit. An increase in working capital indicates that the business has either increased current assets (that it has increased its receivables, or other current assets) or has decreased current liabilities—for example has paid off some short-term creditors. Implications on M&A: The common commercial definition of working capital for the purpose of a working capital adjustment in an M&A transaction (i.e. for a working capital adjustment mechanism in a sale and purchase agreement) is equal to: Current Assets – Current Liabilities excluding deferred tax assets/liabilities, excess cash, surplus assets and/or deposit balances. Cash balance items often attract a one-for-one, purchase-price adjustment. Working capital management Corporate finance Looking north from the Empire State Building, New York City, 2005 Working capital Cash conversion cycle Return on capital Economic Value Added Just-in-time Economic order quantity Discounts and allowances Factoring Capital budgeting Capital investment decisions The investment decision The financing decision Sections Managerial finance Financial accounting Management accounting Mergers and acquisitions Balance sheet analysis ......

Words: 885 - Pages: 4

Premium Essay

Effects of Allowance

...Effects of allowance Efficiency considerations While the scheme is efficient in that it does encourage access to tertiary education through breaking barriers concerned with cost of tertiary education, there are some efficiency considerations concerned to the provision of student allowances which need to be addressed. Due to the fact that once the student earns over $195.78, the student allowance payment is abated at one dollar per dollar earned acts as a disincentive for the student to partake in paid work, in order to receive ‘free’ money. As well as this, it may encourage the student to find work which can be paid under-the-table, so as to have access to more money on a weekly basis. Rather than ensuring that the allowance helps those who do not have access to enough income to support themselves while studying, it rather recommends that the student limits their hours of paid work in order to receive the same amount of money as someone who may have to work to receive it. Being that the student allowance is based on the income of the parents for under 25 year olds, efficiency is also compromised as it allows for some students whose parents are self employed to receive the benefit, through the parents ability to ‘hide’ their actual income; which does tend to occur.[9] The result of this is that a proportion of the students receiving the allowance on the premise that they are from a lower income background, are actually made better off than many of those who, not only do......

Words: 1049 - Pages: 5

Premium Essay

College Students and Allowance

...Kayla Talley Bridget Walsh English 1011 6 February 2014 College Student Should Not Have to Fund Their School Expenses After high school, did you ever fear the words, “part-time job?” I think majority of graduates do; however, people like me, and many others work their life away before even beginning high school. In the article, “College and Allowance,” Silverman explains, “I know there is an allowance in my future when I head to college in a couple of years.” (Silverman 261) Silverman received an allowance because her brother, who attends Duke, did also. Although many college students today expect handouts from their parents, many of us are not as privileged to receive that same treatment, and with that comes self-responsibility. I know I could have been a better scholar had I not had two steady jobs and tried to be a “social butterfly” as well. Jobs can consume much of a student’s time when they allow it to and can highly affect your grades in the negative direction. From my person experience, students shouldn’t have to put themselves through school because being employed hinders academic performance. If you are going to make a commitment to be a student, you should push that priority to the top of the totem pole. As a previous college student, a full-time mother and employee, I know being a student is definitely a challenge. In my previous experience, I found myself putting my job in front of my studies and not to mention that my home-life was a hindering factor......

Words: 730 - Pages: 3

Free Essay

Children and Allowance

...were constantly hearing from my sister and I before we started getting an allowance. Now the question here is whether or not children should get an allowance? In my opinion, I think children should get paid a weekly, or monthly allowance for doing chores around the house. Such as keeping their room’s clean, laundry, dishes and whatever else they are capable of doing. Sooner or later they will become adults and need to learn how to earn and spend their money in a wise way. An allowance is a way of teaching children responsibility, independence and most importantly money management. By giving your child an allowance, it will teach them responsibility. This is something every child needs to learn to be successful in life. If giving your child an allowance depends on whether or not they finish their chores, they will learn that skipping them doesn't pay. It will also teach them that the only way to get money is to earn it. Some kids need the motivation to get their work done. If the allowance is like a paycheck, then most kids would be more willing to take out the trash and complete whatever other chores they may be assigned. Having a good sense of responsibility will later help children, especially when they are in the process of getting a job. It would also help children realize, things won't be handed to them on a silver platter, which will help them be more motivated to get it for themselves. An allowance is also a wonderful way to teach children independence, by giving......

Words: 618 - Pages: 3

Premium Essay

Capital

...CAPITAL BUDGETING DECISION 1. Meaning Capital budgeting denotes situation where funds are invested immediately and returns are expected after a year. In growing orgnisation capital budgeting is more or less continuous process and it is carried out by top management. The role of any Finance Manager is to critically evaluate proposal, evaluation of alternative proposal and select best one. The following are the some of the cases where heavy capital investment may be necessary. A) Replacement of fixed assets: - To replace old Assets. To buy Asset with latest technology. B) Expansion: - It means increase in production capacity to meet additional demand. C) Research and Development: - It is required for those industry where technology in changing rapidly. D) Diversification: - To set up factories, to fulfill need of various markets. To reduce dependency on one market E) Miscellaneous: - To meet legal norms, such as investment in pollution control equipment. 2. Features and significance of capital budgeting Capital budgeting includes investment for long firm funds for long term and their utilisation. Capital budgeting decision affects profitability of firm. Therefore these decisions are very important. A wrong decision taken by finance manager may affect firm’s profitability. The relevance and significance of capital budgeting may be stated as follows. A) Involvement of heavy funds: - Capital budgeting decision requires large amount of......

Words: 3551 - Pages: 15

Premium Essay

Capital Gains

...CAPITAL GAINS TAX (CGT) PFP 14/15 Introduced in 1965 to tax assets which were not bought and sold as part of a trade. A CGT liability may arise when a chargeable person makes a chargeable disposal of a chargeable asset. CHARGEABLE PERSON • individuals resident in UK • partnerships - assessed on individual partners • companies - pay corporation tax on chargeable gains CHARGEABLE DISPOSAL • sale or gift of part or all of an asset • receipt of insurance claim following loss of chargeable asset • loss or destruction of a chargeable asset Certain disposals are not subject to CGT because of the nature of the recipient • disposals by gift to charity • disposal by gift to institutions which exist for public benefit e.g. museums • disposals between spouses: Disposals between a husband and wife (or civil partners) who live together at any time during the tax year in which the disposal occurs are chargeable disposals. However, such disposals are deemed to occur at a disposal value such that neither a chargeable gain nor an allowable loss arises on the disposal. • disposals of chargeable assets caused by death: Net capital losses incurred in the tax year in which the taxpayer dies obviously cannot be carried forward Therefore such net losses may instead be carried back and set off against net gains of the previous three tax years (later years......

Words: 2763 - Pages: 12

Free Essay

Social Capital

...Chapter One Introduction 1.1 Introduction Displaced people fall on new life struggle by losing their social capital and network due to river bank erosion (Field observation). For this reason, in this study, the research problem was loss of social capital, network and role of safety net of the displaced people by River Bank Erosion (RBE). The main objective of this study was to measure the loss of social capital including network due to RBE, to explore the changing situation (social, economic and political) that displaced people face due to loss of social capital including network by RBE, to discover how do displaced people create new social capital including network and to assess the role of safety net to meet present crisis. In the context of socio-economic, geographical and ecological condition, the social capital including network and safety net is more important tool to meet any natural crisis. In this study village, the displaced people lost their material object as well as social capital and network. That’s why this study has focused on social capital including network and safety net programs in the context of river bank erosion. In this research problem, the word social capital has been considered as relationships, connections, links, and affiliations among displaced people and network has been referred as an informal relationship among persons, individuals and groups and safety net has been referred as the roles/programs of government and non government......

Words: 9148 - Pages: 37

Premium Essay

Capital

...to keep paid-in capital separate from earned capital? The owner's equity is subdivided into two categories, which represent the two ways that owners can make contributions to the corporation: * Contributed capital, which includes the contributions to the corporation in return for common stock * Earned surplus (also called retained earnings), which is comprised of the corporation's cumulative earnings, less distributions of those earnings (i.e., dividends) Thus Paid in capital is capital received from investors in exchange for stock. This is recorded as an entry on the balance sheet. Investopedia Says: This term is sometimes also referred to as contributed capital or share capital. Paid in Capital is capital that is brought in by investors in return for stock. It is not capital that is generated as a result of the operation of the company. Also referred to as Contributed Capital or Paid in Surplus. Paid-in capital comes from the corporation’s stockholders who invested in the company. The contributed capital (common stock) is further divided into the minimum or stated capital (amount paid in for par value or, absent a special allocation, the total amount paid in for no par stock) and the capital surplus (amount paid in above minimum, or stated capital) Earned capital is generated through profits of the business. It come from the corporation’s customers. It is important to keep paid in separate from earned capital as: Paid-in capital is more......

Words: 583 - Pages: 3

Premium Essay

Capital Allowance for R & D

...of capital allowances) and those that can be introduced to developed highly skilled manpower to cater to the needs of both the services and the manufacturing sector. Research and Development(R&D) is an advancing technology,diversifying a product line and growing a business.R&D enables businesses to develop new processes and products.R&D Tax Credits allow businesses for reduction of tax for qualified expenditures.Business can claim tax credits up to 3 years and defer taking credit for up to 20 years.R&D tax credits not only rewarded for the final product,but all the changes,differences and experiment involving the final result.Capital allowances are atax relief available to a tax payer who incurs on certain expenditure within a commercial property,regardless of age,requirement or interest held.Capital allowances reduce the amount of tax paid.To trade and to demonstrate ownership the taxpayer must be using the qualifying assets. Qualifying expenditure on plant and machinery will be the apparatus used for carrying on business is “plant” and a mere part of the used for carrying on the business is not “plant” therefore it is not eligible for a tax relief.Munby v Furlong [(1977) 50 STC 72],that books are indeed”plant”,hence qualifying for capital allowances.In this case,a solicitor bought books for his law library soon after he set up practice.He claimed capital allowances on the books,saying that they were chattels of his profession and “plant”. Types of Capital Allowance......

Words: 562 - Pages: 3

Premium Essay

High School Students and Their Allowance Management

...especially teenagers, are going to school, learning many things and preparing of having a job or profession in the near future. In order for this to work out, parents are supporting their financial needs; they are giving allowance to them whenever they are going to school. In this study, allowance is the main topic to be discussed; its definition, importance, purposes, problems associated with it and the ways on how to resolve it. 1.1 Background of the Study: Allowance, or ‘baon’ as what Filipinos call it, is the money given by parents to their children and serves as their financial assistance in school. Since children are not prepared to have a decent job or profession, their parents are responsible in supporting their financial needs. As soon as the child is old or wise enough to understand the basic skills in Mathematics and how money is used in everyday life, their parents or guardians can start giving at least a little amount of cash to them. ‘The Breakdown of Students’ Allowance’, an article in Philippine Star Campus website stated the amount of money that high school and college students typically receive from their parents. They usually get P150 to P250 (excluding transport allowance) per day. The allowance covers P50 to P100 for lunch, P30 to P50 for merienda, P20 on average for photocopies, and P50 to P80 for school requirements like printing, buying pens, etc. It also included that students outside Manila, especially......

Words: 1626 - Pages: 7

Free Essay

Capital

...Capital Semilla Objetivo El Programa de Capital Semilla PYME que pertenece al Programa Nacional Emprendedores tiene como objetivo facilitar el acceso al financiamiento a los proyectos de emprendedores que son técnica y financieramente viables, pero que no pueden tener acceso al sistema bancario comercial, y que no son atractivos para los Fondos de Capital de Riesgo y Capital Privado establecidos en el país, por el alto riesgo y elevados costos de transacción que involucran. Descripción Proporciona apoyo financiero temporal para el arranque y etapa inicial del negocio, a los proyectos de emprendedores que son incubados por alguna de las incubadoras de negocios que forman parte del sistema nacional de incubación de empresas de la Secretaría de Economía. la Secretaría de Economía. Pretende ser un instrumento eficaz, eficiente y oportuno, que contribuya a elevar la competitividad del sector de las micros, pequeñas y medianas empresas. Financia * Desarrollo de un prototipo comercial. * Elaboración de un plan de negocio, estudio de mercado y de factibilidad. * Adquisición de maquinaria y equipo. Requisitos * Que el emprendedor no tenga antecedentes negativos graves en el buró de crédito. * Contar con constancia de Incubación emitida por la Incubadora que incubó y filtró su proyecto. * Darse de alta en el sistema www.capitalsemilla.org.mx ó www.capitalsemilla.com.mx e ingresar su solicitud de apoyo en tiempo y forma. * Demostrar la viabilidad......

Words: 420 - Pages: 2