Financial Accounting Case Analysis Of Accounting Estimate Change And Error Correction

Accounting estimates change and error correction are sometimes difficult to distinguish, especially when the accounting estimates change and the error correction due to accounting error is caused.

The key to distinguish between the two is to determine whether there is any mistake in the earlier accounting estimate.

If accounting information is not considered or is not used correctly when making financial statements, reliable accounting information can be reasonably predicted. This accounting estimate is wrong. It belongs to the previous error and needs to follow the accounting correction method of error correction.

On the contrary, if the accounting estimate at that time was based on the reliable facts that existed and could be obtained at that time, then the change of accounting estimate was due to the changes in the current state of assets and liabilities and the expected future economic interests and obligations. That would be the accounting estimate change and the accounting method of accounting change.

This article focuses on the analysis of accounting estimates change and accounting error correction, accounting and income tax treatment.

Accounting treatment

Accounting treatment of changes in accounting estimates

Accounting treatment change is different from accounting policy change.

The accounting treatment of accounting policy changes requires that the accounting policy changes provide more reliable and more relevant accounting information. The method of retrospective adjustment should be adopted. If it is not feasible to determine the impact of accounting policy changes on the number of pre reported impact, it should start applying the changed accounting policy at the beginning of the earliest period of the traceable adjustment.

At the beginning of the current period, it is not feasible to determine the cumulative impact of accounting policy changes on the previous periods, and the future applicable law should be adopted.

If an enterprise is unable to distinguish a change from an accounting policy change or an accounting estimate change, it should treat it as a change of accounting estimate.

(two) accounting treatment for early correction of errors

The accounting treatment for early correction should be dealt with differently. For unimportant Early mistakes, we should directly adjust the relevant items in the same period as before.

For important early errors, enterprises should use the retrospective restatement method to correct, but it is not feasible to determine the cumulative impact number of previous errors.

The accounting errors in the reporting year that are found between the annual balance sheet date and the financial report approval date and the prior errors that are not important before the reporting year shall be dealt with in accordance with the balance sheet date.

Tax treatment

The twenty-first provision of the enterprise income tax law of the People's Republic of China stipulates: "when calculating taxable income, the financial and accounting treatment methods of enterprises are inconsistent with the provisions of tax laws and administrative regulations, and shall be calculated in accordance with the provisions of tax laws and administrative regulations."

Whether accounting policy changes, accounting estimates change or early accounting errors, as long as there is a discrepancy between the accounting profit and loss of the relevant year and the taxable income of the year, the taxable income must be calculated according to the provisions of the tax law.

Case analysis

Case 3

A company is a listed company.

In 2008, A confirmed its corresponding estimated liabilities due to the guarantee of bank loans to B company which had business with them. It was included in the outlay of the year.

The guarantee is related to A's taxable income.

In 2010, the guaranty liability was actually fulfilled. A company applied to the competent tax authorities for 300 million yuan to guarantee the pre tax deduction during the 2010 corporate income tax settlement.

If the loss is not considered, A company's taxable income amount to 100 million yuan in 2010 and the income tax expense is 25 million yuan.

The company believes that the above guarantee loss is in line with the pre tax deduction conditions, but whether it can be deducted is ultimately determined by the tax authority, and there is uncertainty in the determination of the tax authorities.

When the A company disclosed its annual report 2010, it has not yet obtained the approval document from the competent tax authority on the confirmation of the tax deduction for loss. Therefore, in the annual report of 2010, it affirmed the income tax liability payable 25 million yuan, and confirmed the same amount of current income tax expense.

At the same time, as of the deadline for the payment of income tax in 2010, A company has not actually paid the tax in 2010 because it has not obtained the approval document from the competent tax authorities.

。

In September 2011, the A Corporation obtained the charge of the competent tax authorities: the total amount of 300 million yuan for the guarantee of the B bank loan guarantee was deducted from the taxable income, that is, the amount of tax payable in 2010 is -2 billion yuan, and the annual loss in 2010 can be made up by the amount of taxable income from 2011 to 2015 degrees.

Question: A company obtained the approval of the competent tax authority in 2011. It can deduct 300 million yuan from the taxable income in 2010, resulting in 2010 of the enterprise income tax payable to zero. The 25 million yuan income tax expense should be traced back to 2010 or the 2011 year?

Case analysis:

In this case, A company has performed the bank loan guarantee responsibility for B company since 2008, and has fulfilled the 300 million yuan loan guarantee loss until 2010.

When A company disclosed its 2010 annual report, it has not yet obtained the approval document of the tax authorities' permission to guarantee losses before tax deduction.

The approved document issued by the A company in September 2011 is not a reliable information that can reasonably be expected to be obtained and should be considered when compiling the annual financial report of A company in 2010. Nor does it belong to the "reliable information that can be obtained" when the financial report is approved in 2010.

Therefore, the adjustment of the corresponding income tax expenses and the income tax paid by A company after the approval of the competent tax authorities in September 2011 is not a previous error, but should be judged as

Therefore, the future applicable law should be adopted according to the criteria.

In this case, the relevant accounting and tax treatments are as follows:

2008:

Borrowing: extra operating expenses - guarantee loss of 300 million yuan.

Loans: Estimated Liabilities - guarantee loss of 300 million yuan

Tax treatment: the estimated liabilities of A company are not allowed to be deducted before tax, and the taxable income is increased by 300 million yuan.

Since A can not determine whether the loss can be deducted in the future, the deferred income tax assets are not recognized.

2010:

Borrowing: Estimated Liabilities - guarantee loss of 300 million yuan

Credit: 300 million yuan for bank deposits

Borrowing: income tax expense - 25 million yuan for current income tax.

Loan: tax payable should be paid 25 million yuan on income tax.

In September 2011, it received the approval of the tax authorities, readjusted the 2010 year enterprise income tax returns, reduced the taxable income amount to 300 million yuan, and the income after tax adjustment in 2010 was -2 billion yuan, the taxable income amount was zero, and the income tax amount was zero.

Accounting treatment: the income tax expense mentioned in 2010 shall not be adjusted retrospectively, and the profit and loss of 2011 should be adjusted directly.

Borrowing: tax payable - 25 million yuan in income tax.

Loan: income tax expense - 25 million yuan for current income tax.

A loss of 200 million yuan in 2010 is expected to be made up in the next five years. The deferred income tax assets should be recognized as 50 million yuan and processed according to the future applicable law.

Borrower: deferred income tax assets 50 million yuan

Loan: income tax expense deferred income tax expense 50 million yuan.

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