Page 308 - SBL Integrated Workbook STUDENT 2018
P. 308
Chapter 23
4.3 Financial reporting and tax implications of decisions
Financial reporting: short-term decisions focus on the cash impact, but the
impact on profits and reported accounting measures such
as return on capital employed, earnings per share, interest
cover and gearing may be very different.
Taxation: a decision may move an organisation from one tax bracket
to another; there will be timing differences as tax is based
on profit not cash flows and a decision make have an
impact on available tax reliefs.
These factors should be included in the decision making process before a final
decision is taken.
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