Employee Fraud Losses: When Are They Tax-Deductible?
“Delegation is an inevitable part of doing business; abdication is not.” Delegating responsibilities is a business risk. Abandoning control is a management risk. Public Ruling No. 4/2012 does not prescribe a fixed threshold, such as allowing a cash loss below 2% of turnover as a deduction while disallowing one above 5%. Instead, the analysis requires […]
THIP: Transaction Structure, Credit Risk and Corporate Governance Lessons
The PT TH Indo Plantations (THIP) transaction should not be understood simply as a case of “selling land at a loss”. Its deeper lessons concern transaction structure, counterparty credit risk and corporate governance. These are matters that accountants, directors, audit committees and members of the public can all learn from. Two points should first be […]
Can Interest on an Interest-Free Loan Be Claimed as a Tax Deduction?
Federal Furniture borrowed money from financial institutions and on-lent the funds to its subsidiaries. Some of the loans carried interest, while others were provided on an interest-free basis. The company took the position that the interest could be considered collectively: “Since they are all interest expenses, they should be calculated together.” The tax authority took […]
When a Letter of Award Results in an RM300,000 Stamp Duty Bill
Many companies assume that once a contract has been signed, the process is complete. However, in Binastra Land Sdn Bhd & Anor v. Pemungut Duti Setem, a document titled “Letter of Award” ultimately resulted in: This brought the total amount to RM300,000, excluding litigation costs. A Letter of Award That Set the Entire Project in […]
Emrail: Put Options, Counterparty Risk and the Limits of Contractual Protection
Emrail is a railway engineering company established in 1973, with business activities covering railway engineering, construction and maintenance. In discussing the political debate surrounding the term “sakau”, it is important to maintain a clear distinction. The RCI is not a criminal court, and an investment loss does not automatically establish that anyone committed corruption. The […]
The Constitutional Status of Sections 4C and 24(1)(aa) Following Wiramuda
The Federal Court expressly declared Section 4C unconstitutional in its judgment in Wiramuda. Section 4C treats compensation received as a result of compulsory acquisition as business gains or profits. Section 24(1)(aa), in turn, provides that a debt arising from the compulsory disposal of stock-in-trade is treated as gross income in the relevant basis period. Both […]
MIA CA(M) Qualification: Understanding the Chartered Accountant Pathway in Malaysia
Thinking about becoming a Chartered Accountant (Malaysia), or CA(M)? The right qualification pathway depends on your current academic or professional qualifications. The Malaysian Institute of Accountants (MIA) recognises several routes for individuals who wish to qualify as a CA(M). Recognised Pathways Depending on your background, you may qualify through one of the following routes: The […]
Accrued Expenses: Why a Company Can Owe Money Before Paying It
Have you ever felt that a company is “owing people left, right and centre”, even though no money has left the bank account yet? That is the concept of accrued expenses. What Are Accrued Expenses? Accrued expenses arise when: The expense must still be recorded at month end, even if the supplier’s invoice has not […]
Contract Asset, Contract Liability, Trade Receivable and Deferred Revenue: What Is the Difference?
These four concepts are often confused. The distinction becomes clearer if you ask two questions: Contract Asset A contract asset arises when the company has already performed its obligation, but its right to receive payment still depends on a future condition. Example A contractor has completed a stage of work and achieved a project milestone, […]
Asset Impairment Testing: A Five-Step Guide under MFRS 136 and MPERS Section 27
Asset impairment testing is essentially about asking: How much is this asset really worth now, and is its carrying amount overstated? If the carrying amount of an asset is higher than the amount that can be recovered from it, the asset is impaired and an impairment loss must be recognised. A Simple Five-Step Process 1. […]