Is FBT an appropriation of profit or a charge on Profits? What is its accounting treatment? Is it debited to P& L A/c? Pl give ref of relevant accounting standard?
Thanks in Advance!
Rgds
Shikha
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FBT
Replies (3)
Treatment just like provision for taxation. Same as it
AS ADITYA RIGHTLY MENTIONED THAT IN BOOKS FBT HAS TO BE TREATED IN THE SAME MANNER AS INCOME TAX..
1.0 FBT is also a tax like any other tax paid by the company.
2.0 In respect of the Company, Income tax is paid when there is total income but FBT is paid when there exists certain qualifying expenditure.
3.0 FBT is not the one, where you will pay only when there is profits, it has to be paid irrespective of Company profits.
4.0 Kindly adopt the same treatment that you are adopting for accounting the Income Tax Paid.
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