Australian Business Law the Meaning Essay

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Under the law, this is where the individual is officially receiving the funds (even though they have not physically taken possession of the money). (Taxation Determination 2010) (ANZ Banking Group v FC of T. 94, 2011)

Evidence of this can be seen with the court saying, "The Full Federal Court considered that the Accident Compensation Act 1985 (Vic) creates a presently existing liability to make payments in the future from the moment an employee suffers an injury at work. Such a liability, though perhaps ultimately defeasible, is still a liability 'incurred' within the meaning of section 8-1 of the Income Tax Assessment Act 1997 ('ITAA 1997') (formerly section 51(1) of the Income Tax Assessment Act 1936 ('the ITAA'). Accordingly, the Court held that a deduction is allowable in the year in which the liability arises notwithstanding that the actual payments are not made until a later year. The Court also held that the provisions for such deductions should be bona fide, capable of reasonable estimation and acceptable to the company's auditors to enable certification as a true and fair view of the company's accounts. In view of the decision of the Court (as it applies to workers' compensation claims) the Commissioner will allow similar claims by self-insurers for workers' compensation liabilities under section 8-1 of the ITAA 1997 in the following circumstances: (a) where employers are entitled to self-insure under their relevant workers' compensation / workcare legislation; and (b) the relevant workers' compensation / workcare legislation operates so as to fix the liability on an employer at the time the accident occurs; and (c) the calculation of the provision is made with regard to the relevant principles set out in Taxation Ruling it 2663 (Basis of Assessment of General Insurance activities) and Taxation Ruling TR 95/5 (Basis of Assessment of Reinsurance Activities).

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" This is showing how the definition of incurred is based upon the moment that funds are sent from one party to the other. If they received it when the calendar year is changing, it will apply to the previous year (even though the other party may not physically have the money until the next year). (Taxation Determination 2010) (ANZ Banking Group v FC of T. 94, 2011)

As a result, the court case does not change the meaning of incurred. Instead, it is providing everyone with more clarity about its basic definition. This will help individuals and corporations, to have more clarity as to when they should be accounting for how funds are received. When this happens, they will report more accurate figures to tax officials about the total amounts of income and sources. (Taxation Determination 2010) (ANZ Banking Group v FC of T. 94, 2011).....

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