Visit our COVID-19 site for latest information regarding how we can support you. For up to date information about the pandemic visit www.sacoronavirus.co.za.

bs-regular
bs-extra-light
bs-light
bs-light
bs-cond-light-webfont
bs-medium
bs-bold
bs-black

Community


Share knowledge. Ask questions. Find answers.

Online Share Trading

Engage and learn about markets and trading online

to the accountants out there

Reply
Not applicable
How does this work. SSK writes off R323m for the fine imposed, but they are only eligble to pay this thing down in 3 installments over the next 3 years. So the write it off on last year's income statement - and now have to pay off R60m per year for the next 3 years, with R110m in year 3. (add another R60m slap on the wrist for a separate fine - not provisioned for). So how do they 'unwind' the R300m provision?
0 Kudos
6 REPLIES 6
Preston
Super Contributor
No accountant , but i will try to help. On initial recognition of the fine, they would have debited the Income statement Penalty account and credit your provision acc in the balance sheet. Remember for tax purpose you add Penalties and this is not tax deductible. 2) On your cash flow side, you will present value for provision at date of payment and when you pay , you would Debit yor provision account (Balance sheet) and credit bank.
0 Kudos
prancing_horse
Super Contributor
@skaaptjop. Due to my close ties with certain members of the executive I thought I'd try and get you the answer "from the horse's mouth" To quote the CFO "The quantum of the fines imposed is R363m plus interest of R12m (Total payment of R375m, four payme
0 Kudos
THRESHOLD
Super Contributor
Unwind: DR. provision for "x:, CR. Bank Not taken to income statement. (If tax had been involved also:) CR. Deferred tax account on provision for "x", DR. Tax charge (to income statement.)
0 Kudos
Preston
Super Contributor
There is deffered tax on provision in general but no deffered tax on provision for (FINES). Fines = Unlawful activity.
0 Kudos
THRESHOLD
Super Contributor
Which is why I wrote" "(If tax had been involved also:)"
0 Kudos
prancing_horse
Super Contributor
Just a point of interest for those that hold this stock, SSK the only SA company that is tendering on the new bridge over the Zambezi linking Botswana and Zambia in a JV with a Japanese construction company, but will no doubt be up against in in the form of Korean and Chinese outfits. Estimate R1.6bil.
0 Kudos