Category: Finance

Finance is not just about the management of money. It covers broader subjects that include, accounting, taxation , investments, analysis, etc.

Deception

The life of an accountant[1. In this context, we will refer to all accountants in different fields/practices as accountants, including general accountants, auditors, tax practitioners, finance, etc. ] is boring. Let me tell you why:

We have seen blockbuster movies telling stories about the lives of lawyers, doctors, military and police personnel, sales people, and even stock brokers. But how many movies have you seen that feature the main character playing the role of an accountant?

Not too many, right? That is, if you can remember one at all. The life of an accountant is so dull that scriptwriters can hardly think of an interesting storyline about it.

However, in the 2008 movie, “Deception“, starring Ewan McGregor (as Jonathan McQuarry), Hugh Jackman (as Wyatt Bose), and Michelle Williams (as S):

An accountant is introduced to a mysterious sex club known as The List by his lawyer friend. But in this new world, he soon becomes the prime suspect in a woman’s disappearance and a multi-million dollar heist.

Source: IMDB

Ewan McGregor played the role of an Audit Manager for a fictional accounting firm “Worth & Berman”. Yet, the movie paints a typical accountant/auditor as living a boring life, working late most of the times, zero social life, and a monotonous home-work-home routine. I believe the movie even portrays accounting as not-so-lucrative profession. Continue reading

Timing

4,066 out of the total 8,525 candidates passed the recent CPA Licensure Examinations (October 2011). That’s a whopping 47.7% passing percentage — compared to that during our time ten years ago, which was around 17-18% only.

Okay, so now I’m making a bold statement here. But this is just my opinion, and this is my blog.

I personally believe that passing the CPA board exams is not a matter of whether you pass or fail. It’s not you versus the exams per se. Instead, it’s you versus the other candidates to make it to the top whatever percent the examiners wish to pass.

That’s why I find it rather unfair that they only allowed a really small percentage of examinees — less than 20% — to pass during our time. I’m sure some many of our contemporaries would have otherwise made it if they took the exams today, and thus enjoy the status as such — a licensed CPA. Statistics, by itself, does not necessarily mean the candidates of our time in general are any less intelligent/brilliant than the candidates of today.

Announcement: There are No Solutions Manual Here

This blog has lately been bombarded with the request for a copy of the solutions manual of the reviewer book of Atty. Conrado Valix on Financial Accounting. I have confirmed that the commenter, Maria Luz, is offering a copy of the answer keys FOR A FEE.

This site is not a market place, and I don’t think I can allow that to happen. All comments requesting for the manual will now be deleted, and future comments ignored. All comments that are clearly out of topic will find themselves in the trash.

So everybody is requested to refrain from posting comments regarding the solution manual.

Implementing Rules and Regulations – RA 9504

At long last, the BIR has issued the final IRR (Implementing Rules and Regulations) of Republic Act No. 9504, an Act Amending Sections 22, 24, 34,35, 51 and 79 of Republic Act no. 8424. It’a available for download from the BIR website. Thanks to Nora for the heads up.

For sure, a lot of people who have long been waiting for this release will deluge in the website and may bring their server down. I already downloaded a copy (including annexes) and compiled them myself.

It’ll be available for download here.

Pertinent Articles on RA 9504

There are pertinent articles regarding RA 9504 over at Punongbayan & Araullo’s Press Room. They describe the issues surrounding the law.

You can read the articles here, here, and here.

Many concerns have been raised, and my favorite:

Is this really what RA 9504 intended — to create and encourage absurd situations? Can’t the BIR, at least, read the real intent of RA 9504 and help promote social justice by saying that any income received by a worker over and above the minimum wage, to the extent that the tax distortion is eliminated and the take home pay is equalized, be still exempt from taxes as a MWE?

It may be difficult to justify such move, considering that the flaw is in the law itself. But the BIR was able to do it in certain instances in the past.

With these good, pertinent, and timely articles from an accounting firm website, P&A would have better hosted a discussion by offering comments or provided a forum. It would have been a good discussion, instead of just a lone standing article.

De Minimis Benefits under the NIRC

Disclaimer: The article that follow is my personal opinion, intended for discussion purposes only. It should not be construed as official opinion or regulation by any governmental agency that has authority over the matter.

Found this in my inbox:

Remy:
Can you help me understand what is the maximum amount of de minimis that could be extended to employees? What are other tax deductions can an employee have?
Thanks.

The National Internal Revenue Code of 1997 only mentions of De Minimis Benefits as one of the fringe benefits that are not taxable (Section 33.C). No definition whatsoever. As such, no explicit amount was provided for in the law.

Continue reading

Republic Act 9504

An Act Amending Sections 22, 24, 34,35, 51 and 79 of Republic Act no. 8424, as amended, otherwise known as The National Internal Revenue Code of 1997

Looking at the stats of this site, I’m sure many are already looking for a copy of the law. I have good and bad news: the good news–I have a copy of the law; the bad–I have a bad copy.

Download: RA-9504 pdf (440kb)

As expected, there were no changes in the progressive tax table. Our lawmakers and our President sure have gained credits for themselves for passing the bill into law. But it only did affect the personal exemptions allowed for most of us taxpayers. Only a part of the taxable income was adjusted, not the whole.

Come to think of it, rice in 1997 was (at the maximum, maybe) P20 per kilo. Now, how much is it? You can answer that question. That’s basically how inflation has gone up since 1997, when the original law (RA 8424) was enacted.

The Tax Exemption Bill

According to this news, the approval of the tax exemption bill that’s been pending in the Senate was rushed. I say this has long been overdue.

MANILA, Philippines — With three weeks left before Congress goes into recess, the Senate is rushing the approval of a long-awaited measure that seeks to exempt minimum wage earners from paying the income tax.

But with the inflation since 1997, the brackets in the progressive tax table definitely needs as much adjustment as the personal exemption. Otherwise, it would just be like saving the lowly taxpayers a meal a day when they eat three times a day.

Continue reading