1.3 Accounting Periods Flashcards
When does an AP begin for companies? x4
Earliest of:
- the commencement of trading by the company
- the acquisition of a source of income
- immediately after the previous AP ends
- the company becoming resident in the UK
(SEE: PAGE 56 QUESTION 9.3) Question has an example of acquiring a source of income.
Other examples of acquiring a source income are:
- A company purchases an investment property that generates rental income
- A company acquires a business that has existing contracts for the provision of goods or services
- A company receives its first payment for services rendered or goods sold
- A company inherits assets that generate income (such as a trust or estate)
- A company starts to earn advertising revenue from a website or other platform
When does an AP end for companies? x5
What is the key part of the above?
Earliest of:
- the cessation or commencement of trading
- the company becoming dormant, ie having no sources of income
- the end of a companies period of account
- 12 months after it began
- the company beginning or ceasing to be resident in the UK
How long is an AP for companies? Can an AP exceed that length?
What is the maximum period of account (POA) for companies?
An AP is 12 months long. It can never exceed 12 months in length.
The maximum period permitted under the Companies Act is 18 months.
Which period are companies liable to corporation tax?
What is that period often referred to as?
For each AP
the Chargeable Accounting Period (CAP)
RE: When an AP Begins,
Name some examples of acquiring a source of income? x5
Other examples of acquiring a source income are:
- A company purchases an investment property that generates rental income
- A company acquires a business that has existing contracts for the provision of goods or services
- A company receives its first payment for services rendered or goods sold
- A company inherits assets that generate income (such as a trust or estate)
- A company starts to earn advertising revenue from a website or other platform
