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Q. Explain about Tax Ramifications?
i) Exercise price effects capital gains of individual and effects compensation expense used by corporation for calculating company's compensation expense for tax purposes,
ii) Tax ramifications - company
(1) Discounted options which become vested on or after January 1, 2005 are subject to non-qualifying deferred compensation rules - Holder is needed to select a fixed exercise date no later than December 31, 2006 or be subject to immediate taxation on vesting, a 20 percent penalty and an interest assessment.
(2) May cause the loss of tax deductions under Section 162 (m), deduction that public companies take for compensation to chief executive officer and next four highest compensated officers is limited to $1 million each. Deduction for stock options in not usually limited. Though, discounted options don't qualify as performance based compensation and hence the deduction that company would get may be completely or partially lost. Additionally discounted stock options don't qualify for Incentive Stock option (ISO) treatment. (ISO there is no payroll tax or withholding requirements for ISO's) - If company mistakenly treats backdated stock as an ISO the company my fail to meet payroll tax and income tax withholding requirements.
State the term Reliability- Accounting Information Accounting must be free from significant error or bias. It must be capable of being relied upon by managers to represent
Complete the table and use the information to determine profit maximization or loss minimization. 1. Complete the table Normal 0 false false false EN-I
Mauve Corporation began operations as a farm supplies business and used a fiscal year ending September 30. The company gradually went out of the farm supplies business and into the
Weighing up the costs and benefits You may feel that, when considering a piece of accounting information, provided four main qualities identified are present and it's material
Fund Accounting - Method of ACCOUNTING and presentation whereby LIABILITIES and ASSETS are grouped according to the purpose for that they are to be used. Normally used by governmen
Q. Explain the Auditing Standards? Auditing Standards - Guidelines to which an AUDITOR adheres. Auditing standards encompassauditor's professional qualities, as well as her or
CONVERSION INTO A COMPANY The partners may convert their business and trade in form of a company. This may be due to some of the advantages a company has over a partnership. E.g.
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#explain the accounting cyclequestion..
Resulting trusts Resulting trusts occur where equity regards the property which is held by a trustee as belonging in equity to the person who transferred it to, or caused it to
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