Advise Connect-IT on the tax treatment of the payments

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Reference no: EM131608070

Assignment Case/Question - Connect-IT vs Viclnvest

'Connect-IT' is an Australian mid-tier telecommunications company specialised in providing mobile coverage and network infrastructure services in Victoria and South Australia.

In August 2017, one of its corporate clients 'Viclnvest' decided to move to another mobile provider and negotiated the full termination of their contract, which included corporate mobile accounts and other corporate mobility services.

The parties agreed on the payment of a termination fee calculated on the estimated loss of profits for the next year, which amounted to a total of $7,500,000. This amount was to be paid in two equal installments: the first one by 10 December 2017, and the second one by 10 July 2018.

The contract still had 4 years to run and the impact to Connect-IT's annual revenue was estimated to be 40%.

Required: Advise Connect-IT on the tax treatment of the payments received from Viclnvest for the year ending 30 June 2018, applying legislation and case law to support your answer.

Reference no: EM131608070

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Reviews

len1608070

8/22/2017 1:29:23 AM

Can you provide me quote for the attached assignment along with the earliest time you can complete this. Writing — Writing skills are assessed based on the quality of the arguments presented, marks are attributed where student presents a well organised essay written in academic English, with logically sequenced and coherent paragraphs and proper application of legislation and case law. A goad essay must be clear, objective, and easily understandable, and must provide a conclusion that is logically derived from the arguments presented Essays whose paragraphs are not logically organised, with tautological arguments and poor syntax will receive less marks depending on the quality of the work presented.

len1608070

8/22/2017 1:29:18 AM

Quantitative Literacy — Quantitative literacy is assessed based on the demonstrated capacity to correctly interpret question values with reference to Business/Accounting concepts and general knowledge expected from final year Accounting students. Critical Thinking / Creative Problem-Solving - Critical thinking/Creative Problem Solving skills are assessed based on the student's demonstrated capacity to make reasonable, justifiable and original assumptions leading to a correct and coherent conclusion grounded on legal provisions and case law precedents.

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