Log-book 18-03-2020, 5th Lesson: Heavy Corona-water sailing
The current coronavirus epidemic affects life of every one of us (I hope not in absolute terms). We had to change our lives and business models very quickly so that we could cope with the current situation, but also to survive not only a possible infection, but above all the economic and social consequences that the current storm caused and will provoke in the future. I dare say, and I hope that no one will denounce me that maybe the subsequent ripples will be worse than the storm itself. I hope it will not touch anyone personally, if I dare to highlight the positives of the current crisis and – in line with my style - to align my observations with what I have experienced at sea.
Capitalization of interest within acquisition cost of fixed assets
During our audit practise, we encounter cases where companies address the potential negative tax implications of financing their investment and operating needs. There is, therefore, an increasing effort to optimize the tax base. This idea led us to summarize the possible procedures and pitfalls of this issue.
Life insurance? Think twice!
Paid contributions to private life insurance is one of the ways how to reduce a tax base. But is that really convenient?
Taxes in the time of coronavirus
If the economic crisis was spoken at the beginning of the year, it was only quietly and usually with the wish that it would be as mild as possible and that we would have enough time to prepare. Even more common was the belief that there would be no crisis, only a bit of a cooling. But the COVID-19 pandemic has brought changes to our lives that we couldn't even imagine a few days ago. With them, the economic crisis has invaded our lives as well. No one doubts anymore that it will occur.
Does Coronavirus have an impact on financial statements for the year ended December 31, 2019?
Both personal and working life of all of us starts to be affected by the difficult economic situation that has emerged in the global economy related to Coronavirus. In the moment, when I am writing this article, ie. on March 14, 2020, many companies implemented home office or decreased a volume of its production. Shops, with some exceptions, are closed as well as restaurants. Only time will show a real economic impact.