Financial Risk Manager

Ways of Financial and Risk Management

Enterprise Resource Planning - ERP

Bookmark and Share

ERP stands for Enterprise Resource Planning. ERP is a way to integrate the data and processes of an organization into one single system. Usually ERP systems will have many components including hardware and software, in order to achieve integration, most ERP systems use a unified database to store data for various functions found throughout the organization.

The Ideal ERP System is when a single database is utilized and contains all data for various software modules. These software modules can include:

Advantages of ERP Systems

Disadvantages of ERP Systems

For further details pleae click here!

Labels:

posted @ 4:53 PM, ,

Islamic standard for Ijarah - IFAS 2

Bookmark and Share

State Bank of Pakistan has decided to allow implementation of Islamic Financial Accounting Standard for Ijarah (IFAS 2) w.e.f January 01, 2009. Accordingly, Islamic Banking Institutions (IBIs) shall ensure that henceforth all returns / statements submitted to State Bank as well as the Quarterly/Annual Financial Statements shall be prepared in line with this Standard.
To see the complete standard click here!
Ref: SBP

Labels:

posted @ 12:11 PM, ,

SBP guidelines for credit card business

Bookmark and Share

The State Bank of Pakistan issued comprehensive operational guidelines for credit card business of commercial banks/DFIs, outlining code of conduct for various aspects of credit card operations including their marketing, interest rate charges, recovery of dues, billing processes etc.
Some of the main features of the guidelines are; Banks / DFIs

To see Complete guidelines please visit here!

Labels: ,

posted @ 2:30 PM, ,

ICAP announced CA Final Result

Bookmark and Share

My heartiest Congrtulations to all friends who qualified as Chartered Accountant completely / partly. Some of these are

Wish you all the best . Inshallah Allah will bestow all of us his blessing.

Labels:

posted @ 1:45 PM, ,

GDP Vs. GNP

Bookmark and Share

The gross domestic product (GDP) or gross domestic income (GDI) is one of the measures of national income and input for a given country's economy. GDP can be defined in three ways, all of which are conceptually identical.
The most common approach to measuring and quantifying GDP is the expenditure method:
GDP = Comsumption + Gross investment + Government spending + (Exports − Imports)
GDP = C + I + G + (X − M).

Difference between GDP and GNP:

GDP is concerned with the region in which income is generated. It is the market value of all the output produced in a nation in one year. GDP focuses on where the output is produced rather than who produced it. GDP measures all domestic production, disregarding the producing entities' nationalities.

In contrast, GNP is a measure of the value of the output produced by the "nationals" of a region. GNP focuses on who owns the production. For example, in the United States, GNP measures the value of output produced by American firms, regardless of where the firms are located.

The difference is that GNP includes net foreign income (the current account) rather than net exports and imports (the balance of trade). Put simply, GNP adds net foreign investment income compared to GDP.

Labels:

posted @ 9:51 AM, ,

Islamic Economic System

Bookmark and Share

Islamic Economics differs fundamentally from man-made laws and systems in defining economic problem. It represents the only wholly independent, alternative economic paradigm in the world today. It is based on principles revealed from Islamic sources as norms for human welfare that offer a strikingly alternative set of parameters for economic activity.


Some of the Salient Features of islamic economic system include
  1. Allah is the sustainer

  2. God is real owner of everything and man is merely a trustee

  3. Everything created for service and use of man

  4. Concept of halah and haram

  5. System of sadaqat and zakat

  6. Prohibition of interest

  7. Ban on hoarding of wealth

  8. Policy of moderation

  9. Condemnation of monasticism and materialism

  10. Equity and not equality

To see in details please click here!

Labels:

posted @ 5:10 PM, ,

Economic and Business Updates - January 19 to 25, 2009

Bookmark and Share



Ref: Dawn dated 26-01-2009 (Economic and Business Review)

Labels: ,

posted @ 1:40 PM, ,

Monthly Review - January 2009

Bookmark and Share

Doubt about Pakistan's ability to meet IMF targets remains due to following indications;

If, as seems likely, the government misses its targets, three options will arise.

Ref: Economist Intelligence Unit

Labels: ,

posted @ 1:51 PM, ,

Exporters get one-year grace for loan payment

Bookmark and Share

Exporters have been demanding extension of payment, saying a slowdown in business activities and a liquidity crunch had put them in a difficult situation. The State Bank of Pakistan (SBP) announced on Thursday a Rs.12.000 billion plan to help borrowers of the export financing scheme, deferring payment of their loans for one year.

Salient features of the plan are as follows;

Ref: Business Recorder dated 22-01-09

Labels: ,

posted @ 11:43 AM, ,

Companies Buy-Back of Shares - SECP

Bookmark and Share

Section 95A of the Ordinance, recently notified by the Federal Government allows the listed companies to buy-back/repurchase their own shares and hold such shares as Treasury Shares, whereas under the old Section 95A, the repurchased shares were required to be cancelled. The buy-back /repurchase may be used as a tool to bring stability in market prices of the shares that are undervalued on the stock market. Buy-back/repurchase of shares by listed companies may consequently improve earning per share.

Conditions for Purchase of Shares:
(1) A company may Purchase its own shares if it fulfills the following conditions:

(2) A company that has obtained relaxation, if any, from the requirements of listing regulations of any stock exchange of the country or rule 9 of the Companies (Issue of Capital) Rules, 1996 regarding minimum allocation of capital to the general public, shall not Purchase shares under the Regulations unless the condition relating to increase in paid-up capital or relating to disinvestment of shares by the sponsoring shareholders, imposed at the time of granting such relaxation by the Commission or the stock exchange (s) is met.


(3) A share that has not completed at least two anniversaries of its formal listing on a stock exchange shall not be eligible for Purchase under the Regulation.


(4) These Regulations shall not be applicable on buy-back of shares made for delisting of a company.


(5) A company shall not purchase shares in case any petition for its winding up has filed with a court.


(6) During the Purchase Period, a Purchasing Company shall not file petition for voluntary winding up.


Read the complet draft of the said Regulations here!

Labels:

posted @ 10:26 AM, ,

Citigroup Strategy for 2009

Bookmark and Share

Investment Summary:

Dividend Duration:

Who’s in Charge – the Market, Earnings or the Consensus?

Buying Tangibles, Not Dreams

A Ratio for Every Season

Goodbye Momo, Welcome Value

Myth: Decoupling. Busted, for Now

What We Like and What to Avoid

Ref: Report by Markus Rosgen, Head of Regional Equity Strategy (Citigroup)

Labels:

posted @ 11:41 AM, ,

Basel II - An Introduction

Bookmark and Share

Background:
Capital requirements rules state that credit institutions, like banks and building societies, must at all times maintain a minimum amount of financial capital, in order to cover the risks to which they are exposed. The aim is

The purpose of Basel II is to create an international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face.
Such an international standard can help protect the international financial system from the types of problems that might arise should a major bank or a series of banks collapse
Generally speaking, these rules mean that the greater risk to which the bank is exposed, the greater the amount of capital the bank needs to hold to safeguard its solvency and
The Basel II framework consists of three 'pillars':

The Committee listed a number of operational risk events which were identified (with co-operation from the industry) as having the potential to result in substantial losses:
Internal fraud – for example, intentional misreporting of positions, employee theft, and insider trading on an employee’s own account.

Three approaches for calculating capital adequacy
In calculating operational risk capital charges, Basel II set out three different methods which may be adopted:

The Basic Indicator Approach is the simplest of the three approaches, and will be the default option for most firms. It applies a relatively straightforward calculation based on the firms' income to determine its capital requirements.
The Standardised Approach again relies on calculations based on income, but with different percentages applying across different business lines. To be able to take advantage of the Standardised Approach firms will have to meet certain qualifying criteria.
The Advanced Measurement Approach is the most complicated of the three options. Under this approach, each firm calculates it own capital requirements, by developing and applying its own internal risk measurement system.

To see the full basel document, please visit here!

Labels:

posted @ 3:30 PM, ,

Medical Allowance - Tax Treatment

Bookmark and Share

According to Clause 139 of part 1 (Exemption from total income) of 2nd Schedule of Income Tax Ordinance, 2001

a) If Medical Facility or reimbursement of actual Medical expenses is provided:

b) Medical Allowance provided: Tax Treatment is exempt upto 10% of Basic Salary

c) Medical allowance is provided in addition to medical facility or reimbursement in accordance with the terms: Tax Treatment is Medical allowance fully taxable and Facility / reimbursement is Fully Exempt if NTN of medical practitioner and employer's attestation are available.


d) Medical allowance is provided in addition to medical facility or reimbursement but NOT in accordance with the terms: Tax Treatment is Medical allowance is exempt upto 10 % of Basic Salary and Facility / reimbursement is Fully taxable.

Ref: Income Tax Ordinance, 2001

Labels:

posted @ 10:11 AM, ,

Economic and Business Updates - January 12 to 18, 2009

Bookmark and Share

THE State Bank has announced that all purchases of foreign exchange relating to the import of POL products will be made by bank s from the inter-bank market.
Ref: Dawn - Economic and Business Review dated 19-01-2009

Labels:

posted @ 12:12 PM, ,

Terms of Delivery used for International Trade

Bookmark and Share

There are a series of international sales terms widely used throughout the world. They are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices. Some of those Terms of delivery include following

Ex Works (EXW) : (Departure)

- The seller makes the goods available at his premises.
- The risk of ownership is transferred to the buyer at sellers premises.

Free On Board (FOB) : (Main carriage unpaid)
- The seller must load the goods on board the ship nominated by the buyer
- Cost and risk being divided at ship's rail.
- The seller must clear the goods for export.

Cost and Freight (CFR or CNF) : (Main carriage paid)
- The seller must pay the costs and freight to bring the goods to the port of destination.
- The risk is transferred to the buyer once the goods have crossed the ship's rail

Cost, Insurance and Freighnt (CIF): (Main carriage paid)
- The seller must pay the costs and freight to bring the goods to the port of destination.
- The risk is transferred to the buyer once the goods have crossed the ship's rail
- The seller procure and pay for insurance for the buyer

Delivered Ex Ship (DES) : (Arrival)
- The passing of risk does not occur until the ship has arrived at the named port of destination and the goods made available for unloading to the buyer.
- The seller pays the same freight and insurance costs as he would under a CIF arrangement.
- The seller has agreed to bear not just cost, but also Risk and Title up to the arrival of the vessel at the named port.
- Costs for unloading the goods and any duties, taxes, etc. are for the Buyer.
Ref: Incoterms or international commercial terms closely correspond to the UN Convention on Contracts for the International Sale of Goods

Labels:

posted @ 10:42 AM, ,

UN predicts zero world growth in 2009

Bookmark and Share

United Nations has downgraded its forecast for this year after a worse-than-expected economic performance during the fourth quarter of 2008. The world economy is heading for zero growth in 2009 and predicting and showing;

Some of the suggestions to make over all this crises are;

Ref: United Nations Geneva (Associated Press) by Frank Jordan

Labels:

posted @ 2:00 PM, ,

Top Obama Advisers Clash on Global Accounting Standards

Bookmark and Share

Paul Volcker, a former chairman of the Federal Reserve Board under Presidents Jimmy Carter and Ronald Reagan and now the chairman of Obama's Economic Recovery Advisory Board said, "I do think we ought to be working toward international accounting standards and have them standard around the world under the general aegis of the International Accounting Standards Board, and there's been a lot of progress in that direction."

Even as Volcker was pushing IFRS, however, Mary Schapiro, Obama's nominee for chairman of the Securities and Exchange Commission was advocating a go-slow approach on implementing the global standards in the United States. Schapiro, who heads the Financial Industry Regulatory Authority, told the Senate Banking Committee during her confirmation hearing today that she plans to back off of current SEC Chairman Christopher Cox's plans proposed roadmap for converting U.S. companies to international financial reporting standards. "I will not be bound by the existing roadmap that's out for public comment," she said.

Schapiro said she has concerns about the pace of the timeline, the independence of IASB, and the quality of the standards themselves. Considered more principles-based than U.S. generally accepted accounting principles, IFRS are not as detailed and give more room for interpretation, she said.

She is also worried about the cost use companies might incur in making the conversion, considering that the SEC estimates it will cost as high as $32 million for each of the largest of companies to adopt IFRS.

Ref: Cfo.com

Labels:

posted @ 10:12 AM, ,

Financial Ratios

Bookmark and Share

Financial ratios are tools for interpreting financial statements to provide a basis for valuing securities and appraising financial and management performance.
A good financial analyst will build in financial ratio calculations extensively in a financial modeling exercise to enable robust analysis. Financial ratios allow a financial analyst to:
  • Standardize information from financial statements across multiple financial years to allow comparison of a firm’s performance over time in a financial model.
  • Standardize information from financial statements from different companies to allow an apples to apples comparison between firms of differing size in a financial model.
  • Measure key relationships by relating inputs (costs) with outputs (benefits) and facilitates comparison of these relationships over time and across firms in a financial model.

In general, there are 4 kinds of financial ratios that a financial analyst will use most frequently, these are:
- Performance ratios
- Working capital ratios
- Liquidity ratios
- Solvency ratios
These 4 financial ratios allow a good financial analyst to quickly and efficiently address the following questions or concerns:
Performance ratios:


  • What return is the company making on its capital investment?
  • What are its profit margins?

Working capital ratios


  • How quickly are debts paid?
  • How many times is inventory turned?
Liquidity ratios
  • Can the company continue to pay its liabilities and debts?
Solvency ratios (Longer term)

  • What is the level of debt in relation to other assets and to equity?
  • Is the level of interest payable out of profits?

Labels:

posted @ 1:49 PM, ,

Refund of Excess Tax

Bookmark and Share

Section 170: Refunds states that
(1) A taxpayer who has paid tax in excess of the amount which the taxpayer is properly chargeable under this Ordinance may apply to the Commissioner for a refund of the excess.
(1A) Where any advance or loan, to which sub-clause (e) of clause (19) of section 2 applies, is repaid by a taxpayer, he shall be entitled to a refund of the tax, if any, paid by him as a result of such advance or loan having been treated as dividend under the aforesaid provision.
(2)An application for a refund under sub-section (1) shall be –
(a) made in the prescribed form;
(b)verified in the prescribed manner; and
(c) made within two years of the later of –
(i) the date on which the Commissioner has issued the assessment order to the taxpayer for the tax year to which the refund application relates; or
(ii) the date on which the tax was paid.
(3)Where the Commissioner is satisfied that tax has been overpaid, the Commissioner shall –
(a) apply the excess in reduction of any other tax due from the taxpayer under this Ordinance;
(b) apply the balance of the excess, if any, in reduction of any outstanding liability of the taxpayer to pay other taxes; and
(c) refund the remainder, if any, to the taxpayer.
(4) The Commissioner shall, within forty five days of receipt of a refund application under sub-section (1), serve on the person applying for the refund an order in writing of the decision after providing the taxpayer an opportunity of being heard.
(5) A person aggrieved by-
(a) an order passed under sub-section (4); or
(b) the failure of the Commissioner to pass an order under sub-section (4) within the time specified in that sub-section, may prefer an appeal under Part III of this Chapter.
Ref: Income Tax Ordinance, 2001

Labels:

posted @ 2:26 PM, ,

Indices Used To Measure Inflation

Bookmark and Share

When prices of most goods and services are rising over time, the economy is said to experience inflation The percentage increase in the average level of prices over a year is called the inflation rate. Inflation can impose high cost on economies and societies, can disproportionately hurt the poor and fixed income groups, can create uncertainty throughout the economy and can undermine macro economic stability.

Different price indices are used to measure inflation. A price index is a measure of the aggregate price level relative to a chosen base year. In Pakistan a consumer price index (CPI), a sensitive price indicator (SPI) and a wholesale price index (WPI) are compiled. They commonly have the base year 2000-01.

CPI is a main measure of price changes at retail level. It indicates the cost of purchasing a representative fixed basket of goods and services consumed by private households. In Pakistan CPI covers the retail prices of 374 items in 35 major cities2 and reflects roughly the changes in the cost of living of urban areas.

SPI shows the weekly change of price of selected 53 items of daily use consumed by those households whose monthly income in the base year 2000-01 ranged from Rs.3000 to above Rs.12000 per month. SPI also informs about the actual position of supply: whether the commodity is available in market or not. If the commodity is not available, the reason for that is also recorded. SPI is based on the prices prevailing in 17 major cities and is computed for the basket of commodities being consumed by the households belonging to all income groups combined as in CPI.

WPI is designed for those items which are mostly consumable in daily life on the primary and secondary level; these prices are collected from wholesale markets and also from mills at organized wholesale market level. The WPI covers the wholesale price of 106 commodities prevailing in 18 major cities of Pakistan. Through its own staff and voluntary co-operation of government departments, autonomous bodies and private agencies FBS receives the wholesale prices from various areas in Pakistan. The prices are usually reported on monthly basis. WPI covers 425 items, divided in five major commodity groups viz (i) Food, (ii) Raw material, (iii) Fuel, Lighting and Lubricants, (iv) Manufacturing, (v) Building material. So, for many of the commodities more than one specification and markets have been used to have average prices.
Hence, all three indices are needed to quantify inflation for the economy as a whole. In Pakistan as well as in most countries, the main focus for assessing inflationary trends is placed on the CPI, because it closely represents the changes in the cost of living.

CPI, SPI and WPI for the year 2008-09 have increased by 24.43%, 30.96% and 27.98%respectively over the corresponding period of 2007-08. It increased by 8.01%, 11.03% and 10.26% respectively, in 2007-08 over the corresponding period of 2006-07 and in 2006-07,
increased by 8.39%, 11.80% and 7.80% respectively over the same period of 2005-06.

Ref: Federal Bureau of Statistics

Labels:

posted @ 10:35 AM, ,

Economic and Business Updates - January 05 to 11, 2009

Bookmark and Share

The government is to increase margins of oil marketing companies and petroleum dealers by 12.5 percent and 25 percent per liter respectively as both the stakeholder have given tough time to Islamabad after reduction in their profits.
The banking industry deposits witness a significant decline of Rs124 billion in the third quarter of 2008, despite relatively steep rise in weighted average return on deposits, say industry sources.
Banks approach the competition commission of Pakistan for condo nation of time period in filing of appeal against the commission’s order on imposition of penalty.
Global recession and emerging deflation in developed countries start affecting Pakistan’s exports, which are gradually declining since October. Though, exports of the country during the first five months (July-November, 2008) increased by 11.88 percent, trend shows the exports are sliding downwards.
In a policy shift, the government is to review the prices of petroleum products on a monthly basis, instead of fortnightly, aimed at bringing stability to the market and minimizing consumer’s problems, sources in the Finance Ministry disclose.
The Indian government imposes 12 percent cuties on cement import, which is aimed at curbing cement import from Pakistan, industry sources say.
Prime Minister Yousuf Raza Gilani directs the Ministry of Petroleum and Natural Resources to arrange uninterrupted supply of oil and gas to IPPs for optimal supply of power.
RICE exports cross record $1.18 billion mark in the first six months of the current fiscal year, says chairman of Rice Exports Association Abdur Rahim Janoo.
The Finance Ministry has achieved all IMF targets including two per cent fiscal deficit by end of December, 2008, and tax collection is likely to touch 10.5 percent of GDP as discussed and agreed, says adviser to PM on Finance Shaukat Tarin.
The Asian Development Bank underlines the need for improving international controls and internal audit in both Punjab health department and at district government level for improving transparency and accountability in the use of public resources and ensure that fund leakage in minimized.
The Utility Stores Corporation starts selling urea fertilizer to check black marketing and facilitate the growers and farmers community.
The Ministry of Industries is grilled by the Economic Coordination Committee of the Cabinet for seeking company specific incentives through revised letter of Intent (LOI) after federal Board of Revenue raised eyebrows on the issue, say official sources.
Finance Minister concedes that monetary overhanging from the unprecedented government borrowing from the State Bank of Pakistan for budgetary support will continue to frustrate the decline in imported inflation.
Phutti arrivals into ginneries rose by 6.91 percent at 9.745 million bales in the fortnight ended December 31, 2008 when compared with 9.115 million bales in the same period last year.
Source: Dawn - Economic and Business Review dated 12-01-2009

Labels:

posted @ 10:49 AM, ,

Export Proceeds - Accounting Treatment

Bookmark and Share

Initial Recognition: A foreign currency translation shall be recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
Recognition of Exchange Difference: Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognised in the Profit and Loss in the period in which they arise.
(Ref: Para 21 and 28 of International Accounting Standard IAS-21)
In the context of above mentioned paragraphs initially export sales would be booked at the spot rate and susequently effect of any change in exchange rate would be charged to Profit and Loss Account.
Accounting Entries:
Initial Recognition:
(Dr) Export Sales Receivables----------1,000
(Cr) Export Sales ----------------------1,000
Subsequently
(Dr) Bank Account---------------------980
(Dr) Exchange Rate Loss----------------20
(Cr) Export Sales Receivalbes----------1,000

Labels:

posted @ 3:29 PM, ,

Feasiblity Study and Business Plan

Bookmark and Share

Feasibility Studies:In order to make wise investments in a marketplace experiencing increasing levels of risk, companies are turning to feasibility studies to determine if they should offer new products, services or undertake a new business endeavor. The purpose of a feasibility study is to determine if a business opportunity is possible, practical and viable. When faced with a business opportunity, many optimistic people tend to focus on just the positive aspects. A feasibility study enables a realistic view at both the positive and negative aspects of the opportunity. A feasibility study is an important tool for making the right decisions. A wrong decision often leads to business failure. For example, only 50% of start-ups are still in business after 18 months and only 20% are in business after 5 years.
Feasibility studies are useful when starting a new business or identifying a new opportunity for an existing business. Ideally, the feasibility study process involves making rational decisions about a number of enduring characteristics of a project, including:

Pre Feasibility Studies: In large (and usually joint venture or multinational) projects, a preliminary study undertaken to determine if it would be worthwhile to proceed to the feasibility study stage.
Business Plan is a document that summarizes the operational and financial objectives of a business and contains the detailed plans and budgets showing how the objectives are to be realized.
Because the business plan contains detailed financial projections, forecasts about your business's performance, and a marketing plan, it's an incredibly useful tool for business planning. For anyone starting a business, it's a vital first step.
The Feasibility Study vs. the Business Plan
Groups often confuse the role of two of the tools used by groups in the project development process; the feasibility study and the business plan. Various components are common to both the feasibility study and the business plan. Assuming positive feasibility study results, some but not all of the information developed in the feasibility study will be incorporated into the business plan. The business plan also contains aspects that were not included in the feasibility study. It would, therefore, be useful to clarify the differences between the two.
The feasibility study is conducted during the deliberation phase of the project development cycle prior to obtaining project financing. It is an analytical tool that includes several scenarios for the decision-makers of the group to utilize in determining if they should continue the project. If, after completion of the feasibility study, the group decides to not proceed, there is no need to undertake the process of creating a business plan.
If the group decides to proceed, they construct a business plan. The business plan is the design for project implementation and, as its name implies, presents the guideline for the project plan. Its purpose is to serve as a blueprint for the group's responses during project operations.
Usually, the business plan contains less emphasis on differing scenarios than the feasibility study. Typically, it elaborates the scenario shown by the feasibility study to be most promising. Since the concept has been shown to be viable in the feasibility study, the business plan is much more focused on what action steps will be taken during and after project implementation.
The business plan is created later in the development process than the feasibility study. By this time project details, which required assumptions for the feasibility study, have been decided. Standard business plans include details such as key management personnel, business location, the financial package, product flow, and possible customers.
Since the feasibility study presents an independent review of the project, persons from outside of the group normally complete it. In contrast, he group typically develops their business plan internally. The group may revise the plan with input from bankers and investors, as the financial situation of the project becomes clearer.
Another difference between the two, although not as important for project development considerations, is that while the feasibility study is only applicable for the developmental stage of a project, businesses continue to use, and revise their business plans after a project has been implemented.
To summarize, a business plan shows the group's intended response to the critical issues revealed in the feasibility study. As the feasibility study refines the group's initial ideas, the business plan uses information from the study to further prepare the project for operation.

Labels:

posted @ 10:24 AM, ,

Economic and Business Review - Last week

Bookmark and Share

THE National Investment Trust (NIT) formally launches Rs20 billion NIT state Enterprise Fund (NIT-SEF).
State Bank of Pakistan issues new guidelines for home remittances-related agreements of exchange companies with foreign entities.
PAKISTAN announces five percent tariff reduction in the existing customs duty on import of around 4,803 items from Saarc member countries Srilanka, Bangladesh, Bhutan, Nepal and Maldives under the Trade Liberalisation Programme agreed in South Asia Free Trade Area (Safta) agreement.
PAKISTAN will have to face the worst load-shedding during the first two weeks of January amid dried up water resources due to canal closures for the purpose of desilting, say sources in Pepco.
THE procurement price of wheat in the domestic market is higher than the prevailing price in the international market, says Mr. Shahid, additional secretary, ministry of food and agriculture.
PAKISTAN is to receive $500 million tranche during this quarter (Jan-March), says Adviser to PM on Finance Shaukat Tareen.
PAKISTAN and Iran fail to reach accord on gas price on the Iran-Pakistan-India (IPI) gas line project during talks held in Tehran.
Quetta Electric Supply Company (Quesco) announces 50 percent cut in power supply to 13 towns and cities of Balochistan from January 1.
THE government approves an average increase of 7.5 percent in gas prices, but rejects the oil and gas Regulatory Authority’s proposal to cut petrol price.
State Bank Provides 90 days waiver for availing financing under export finance scheme (EPS) to all exporters whose export proceeds are overdue till date of issuance of the new circular.
THE government allows export of live animals against foreign currency after a squabble between the commerce ministry and the newly created ministry of live stock and dairy development, it is learnt.
IRAN is to build a dedicated 1000 MW capacity gas based power plant on its border to export electricity to Pakistan, says Minister for Water and Power Raja Pervez Ashraf.
THE Economic Coordination Committee (ECC) of the cabinet, meeting under the chairmanship of adviser to prime minister on finance Shaukat Tareen, takes serious notice of no reduction in commodity prices despite drastic cut in oil and palm oil prices in the international market.
State Bank launches the Banking Sector Strategy (BSS) formulated for the next decade mainly carrying intensive banking reforms.
Source: Dawn - Economic and Business Review dated January 05, 2009

Labels:

posted @ 11:06 AM, ,

Penalty in case of Late Payment of Tax

Bookmark and Share

Section 205. Additional tax of Income Tax Ordinance,2001 states that
(1) A person who fails to pay –
(a) any tax, excluding the advance tax under section 147 and additional tax under this section;
Clause (a) substituted by Finance Act, 2003 which previously read as follows :
(a) any tax, including any advance payment of tax under section 147;
(b) any penalty; or
(c) any amount referred to in section 140 or 141,
on or before the due date for payment shall be liable for additional tax at a rate equal to twelve per cent per annum on the tax, penalty or other amount unpaid computed for the period commencing on the date on which the tax, penalty or other amount was due and ending on the date on which it was paid.
Therefore, late payment by employer for tax deducted at source U/S. 149 would be treated under above mentioned provision of Income Tax Ordinance, 2001

Labels:

posted @ 5:33 PM, ,

Dismentalling of Building or Asset

Bookmark and Share

As per Para 16 of IAS - 16 (Property, Plant and Equipment)
The cost of an item of property, plant and equipment comprises:
(a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
(c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.
As per Para 17 (b) of IAS - 16 one of the examples of Directly attributable costs are the costs of site preparation.
Therefore, dismentalling charges can be capitalised and can be cosidered as cost of acquisition of property in case another structure is commissioned. Otherwise there is no harm to charge the expense as repair and maintenance.

Labels:

posted @ 3:14 PM, ,


Light Within

Blog Roll

ss_blog_claim=eebcdd26d5c32d5838ede03f68f01f91 ss_blog_claim=eebcdd26d5c32d5838ede03f68f01f91