TAX & ACCOUNTING RECONCILIATION

CHARITABLE CONTRIBUTIONs

Deductible in full
- Government
- Certain Foreign inst. Or international Org
- Accredited NGO bu the Philippine Council
on NGO certification (PCNC)

Subject to limitations
- 5% of the taxable income before
considering the consideration.
FOREX
Income Statement whether realized or Only realized gains and losses, not including
unrealized. unrealized
- Transaction is transalted into functional - For conversion of foreign currency to
currency at the spot rate at the date of Php, the prevailing interbank reference
the transactions. rate shall apply.
- Monetary asset and liabilities are - Forex gains losses are recognized when
translated using the closing rate as of the they are actually recognized.
FS date with gains and losses recognized
in P&L.
Employee Benefits
The amount of deductible expense depends on
Includes: whether the plan is registered with the BIR or not
Service Cost - Not registered- Actual retirement
Net Interest Cost benefits paid
- Registered -Actual contribution normal
cost while contribution for past service
liability is amortized over 10 Years.
Leases-Lessee
- Lease expense is deductible as when
All leases are accounted for as a finance lease incurred provided the appropriate taxes
wherein the lessee recognizes. are withheld on lease payments.
- Depreciation expense
- Interest Expense
Losses Generally:
- Realized loss-deductible
- Generally losses are recognized in profit - Unrealized loss – non deductible
or loss in the year incurred. Casualty Losses
- Should be reported within 45 days from
the date of occurrence
- NOLCO can be carried forward over the 3
years.