Gross income - Accrual

Question 2

Facts:
A clothing retailer sold on credit.

Answer 2

People’s stores

Issue:
Has the amount accrued to the TP despite money still being owed?
If accrued, should it be included at face value or present discounted value?

Principle:
Accrued to = entitled to
@ Face value

Question 3

Facts:
A race event was held and resulted in proceeds that the TP divided between two charities. The TP argued that the proceeds did not accrue to them, but to the charities.

Answer 3

Witwatersand Association of Racing clubs

Issue:
Did the proceeds from the race accrue to the PT or the charities?

Principle:
An amount accrues to the TP if the TP has no legal obligation to pay it over (only moral obligation) to another person.

Question 4

Facts:
The TP, a wine farmer< entered into an agreement in terms of which he disposed of wine he had made during the YOA. A portion of the selling price was paid prior to the end of this YOA and the balance was paid in installments after the end of the YOA.

Answer 4

Lategan

Issue:
Is “amount” per the GI definition confined to receipts of “money” ?

Principle:
Even if an amount is payable in the future, the amount accrues to the TP when the TP becomes entitled to the amount. Once delivery has taken place, the seller becomes entitled to the full sale price.
Accrued to = entitled to.

Question 5

Mooi

Answer 5

Accrued to = unconditionally entitled to the amount.