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Denko Pty Ltd manufactures performance motorcycles. During the year, it determined that it could not collect payment in respect of a motor bike it sold
Denko Pty Ltd manufactures performance motorcycles. During the year, it determined that it could not collect payment in respect of a motor bike it sold to a dealer three years ago. Since then, the company no longer manufactures performance motor cycles and instead makes motorised scooters.
Describe the source of Australian tax law which would determine if the company can claim a deduction for the bad debt write off.
Following are key sources of information:
- Tax law being approved by the Australian govt (Taxation Ruling TR 1999/9)
- Filing of the insolvency by the customer and court order
- Trial balance and associated general ledger to compute the taxable income
- Fair value reports for superannuation payments.
- GAAP standards published by local authorities
- Expert's opinion on taxability and financial adjustments.
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