Regular Reset
It is the update that only, at the close of the accounting years that end after the initial adjustment for inflation, should be applied on: Art. 178 LISLR and Art. 110 of the RLISLR
Non-monetary assets and liabilities existing at the end of the year Equity at the beginning of the year The increases and decreases in equity that occurred during the year
Art. 178 LISLR and Art. 110 of the RLISLR
Update Factor: IPC Variation
regular-readjustment-for-inflationThe update for the Regular Adjustment for Inflation will be made based on the Variation of the CPI of the Metropolitan Area of Caracas.
= CPI month date of update
CPI month date of acquisition of the respective item or of the last update
Art. 179, 185 and 186 LISLR and Art. 91 of the RLISLR
Updated Amount and Net Readjustment
Updated Amount = Value of the non-monetary item x CPI Variation Accumulated readjustments up to current period = Updated Amount - Value of the non-monetary item Net readjustment Accumulated readjustments Accumulated adjustments = -
from the period to the current period to the previous period
Regular Readjustment for Inflation
Result of the Regular Readjustment
a) The net readjustment of the period will be accumulated in the account "Readjustment for Inflation"
b) The balance of the account "Readjustment for Inflation" affects the taxable income
c) The debit or creditor balance of the account "Readjustment for inflation" will be canceled against the account "Equity Update"
Art. 178 and 190 LISLR and Art. 110 of the RLISLR
Regular Adjustment for Inflation
Balance of the Adjustment for Inflation
The balance of the account "Adjustment for Inflation" is part of the net taxable income (it appears in the income statement).
Historical Tax Exclusions to Equity
Assets and liabilities and equity should be excluded from
accounts and receivables from shareholders, administrators, affiliates and other related or related companies
Assets, debts and obligations applied in their entirety to the production of profits or enrichments presumed, exempt, exonerated or not subject to the tax established by this Law
Art. 184 LISLR
Modifications of the historical Tax Exclusions to the Equity
The modifications to the account account
HISTORICAL TAX EXCLUSIONS TO HISTORICAL TAX EXCLUSIONS TO HERITAGE will be treated as: HERITAGE will be treated as:
INCREASES INCREASES OR DECREASES OF THE
HISTORICAL HERITAGE Art. 184 LISLR and 110 of the RLISLR
Regular Readjustment for Inflation
Steps for
Regular Adjustment for Inflation
Regular Readjustment for Inflation
Steps for Regular Readjustment for Inflation
1. Identify the types of items and the Historical Tax Exclusions. Register in the Worksheet;
2. Prepare the entries relating to Tax Exclusions;
3. Determine the initial Fiscal Equity, carry out the Regular Readjustment of said Equity in the respective Worksheet;
4. Determine the increases and decreases of Equity that occurred in the taxable period, carry out the Regular Adjustment of said increases and decreases:
Regular Adjustment for Inflation
Steps for the Regular Adjustment for Inflation
5. Carry out the Regular Adjustment of the non-monetary items that come from previous taxable year or incorporated into the current tax year. Prepare the respective Worksheets;
6. Prepare the respective Fiscal entries;
7. Determine the balances of each of the affected accounts
8. Calculate the balance of the account "Readjustment for Inflation", transfer its balance to the tax return and cancel it by transfer to the account
"Equity Update";
9. Prepare the Updated Fiscal Balance Sheet;
10. Prepare the Income Statement (DPJ-26)
Regular Readjustment for Inflation
The Demonstrative Statement of Income, Costs, expenses and Tax Reconciliation of Income Income from the activity Accounting data Expenses Accounting data 35 Salaries and salaries 3 Gross sales 703 36 Interest on loans 11 Total net income 41 Depreciation and amortization 42 Other expenses Cost of sales 43 Total Expenses 12 Initial inventory 712 44 Accounting profit or loss 13 Net purchases 713 Tax Reconciliation of Income 16 Available merchandise 716 Plus: 17 Less Ending inventory 717 53 Income adjustment for inflation Less: 59 Loss adjustment for inflation 34 Total Cost of Sales 734 63 Net enrichment or fiscal loss
Regular Adjustment for Inflation
Fiscal net worth
Regular Adjustment for Inflation
Net Equity
It is the difference between the total assets and monetary and non-monetary liabilities
Total Assets
Less: Total Liabilities
Net Equity
Art.184 of the LISLR
Regular Adjustment for Inflation
Net Fiscal Equity
The difference between the FISCAL EQUITY is considered total assets and liabilities, including updates and exclusions authorized in the Law and the Regulations.
Article 110 of the RLISLR
Article 110 of the RLISLR
Readjustment of Initial Fiscal Net Equity Equity
Update =
Net Equity IPC month Taxable closing date x
Initial Fiscal IPC month Previous closing date
Readjustment of Initial Fiscal Net Equity Equity
Update =
Increase in CPI month Taxable closing date x
Equity IPC month Date of increase
Readjustment in equity increase
Initial Fiscal Net Equity Readjustment Equity
Update =
Decrease of CPI month Taxable closing date x
Equity CPI month Date of decrease
Readjustment in equity decrease
Readjustment of historical Tax Exclusions to Equity
IPC Modifications month Taxable closing date Historical x Tax Exclusions to Equity CPI month Date of modification
Readjustment of initial Fiscal Equity
F Initial fiscal Equity FG Date of closing month of previous period GH Date of closing of current period HI CPI Date of closing of current period IJ CPI Date of closing of month of previous period JK Update Factor K = I / JL Accumulated Equity Update L = F x KM Adjustment for Inflation of the exercise M = L - F
Regular Adjustment for Inflation
Inventories
Inv. Historical Initial = Inv. Historic End
Inv. Historical Initial less than Inv. Historic end
Inv. Historical Initial greater than Inv. Historic ending
A Description class of inventory AB Date of the previous taxable year closing month B Date of the closing month of the current taxable year C IPC date of the closing month of the current year CD IPC month of the closing date of the previous taxable year DE Update Factor to previous period E = C / DF Cost Historical Ending Inventory of the previous fiscal year FG Updated cost of the Ending Inventory until the previous fiscal year GH Accumulated Inventory Adjustment of the previous fiscal year H = G - FI Updated historical cost of the Ending Inventory from the previous fiscal year to the current I = G x EJ Final historical cost of the current fiscal year JK Comparison of Inventories at historical cost: K K1 Yes, Final greater than initial K1 = J - F K2 Yes, Final less than initial K2 = F - J K3 Yes, Final equal to initial K3 = J - FL Updating of the final Inventory to the current closing:L Inventories
Regular Readjustment for Inflation
L1 Yes, Final greater than initial L1 = I + K1 L2 Yes, Final less than initial L2 = (J x I) / F L3 Yes, Final equal to initial L3 = I = F x EM Accumulated adjustment of the ending inventory: M M1 Yes, Final greater than initial M1 = L1 - J M2 Yes, Final less than initial M2 = L2 - J M3 Yes, Final same as initial M3 = L3 - JN Net inflation readjustment taxable year N = (M1 or M2 or M3) - HO Summary for entry of Regular adjustment: O O1 If N is positive, credit to Adjustment for Inflation + O2 If N is negative, charge to Adjustment for Inflation - O3 If N is zero there is no entry 0 Fixed Assets
Adjust from date of Origin of Fixed Assets
Same procedure for accumulated depreciation
Consider variations:
a) Due to incorporation
b) Due to divestment
Regular Adjustment for Inflation
A Description of Asset AB Date of the month of Acquisition B Date of the closing month of the previous taxable year Date of the closing of the current taxable year C IPC date of the month of acquisition CD IPC month of the closing date of the previous taxable year DE IPC month of the closing of the year current taxable EF Update Factor until previous period F = D / CG Update Factor until current period G = E / CH Historical acquisition cost previous closing H i Updated acquisition costs previous closing I = H x FJ Accumulated depreciation Historical previous closing JK Accumulated depreciation Updated previous closing K = J x FL Accumulated Regular Readjustment to previous closing: L L1 On Fixed Asset Costs L1 = I - H Fixed Assets
Regular Readjustment for Inflation
L2 Over accumulated depreciation L2 = K - J L3 Regular Readjustment Accumulated net previous period L3 = L1 - L2 M Historical acquisition costs at current closing MN Acquisition costs updated from acquisition date to current fiscal year N = M x GO Historical accumulated depreciation at current taxable year OP Updated Accumulated Depreciation, from acquisition date to current closing P = O x GQ Accumulated inflation readjustment to current closing: Q Q1 Over Fixed asset costs Q1 = N - M Q2 Over Accumulated Depreciation Q2 = P - O Q3 Readjustment for inflation accumulated at the current closing Q3 = Q1 - Q2 R Net Regular Readjustment of the year R = Q3 - L3 S Summary for the fiscal entry of the Regular Readjustment for Net Inflation of the current year:S S1 Regular Readjustment of fixed assets S1 = Q1 - L1 S2 Regular Readjustment of Accumulated Depreciation S2 = Q2 - L2 S3 Net Regular Readjustment of the current fiscal year S3 = S1 -S2
readjust from date:
b
company
c From the Mercantile Registry d None of the above
readjustments:
Indicate for each statement: True or False • The Inflation Readjustment account will always have a credit balance.
True False
• The Equity Update Account does not intervene in the Regular Readjustment for inflation.
True False
• Taxpayers are required to keep a record of fiscal control.
True False
HACEMOS CA (HACECA) Balance Sheet in Bs. At historical values as of 12/31/2007 Assets Liabilities and Cash Equity 4,590,000 Accounts Payable 13,480,585 Trade Accounts Receivable 20,218,950 Related Payable 7,369,500 Accounts Receivable Shareholders k 2,040,000 Notes payable 4,590,000 Notes receivable M / E 3,825,000 Inventory b 2,295,000 Total Current Liabilities 25,440,085 Total Current Assets 32,968,950 Land c 2,040,000 Long-term debt 19,575,000 Building d 3,825,000 accumulated depreciation
Vehicles
accumulated Depreciation and 1,593,750 Vehicles
3,849,900 705,815 Total Liabilities 45,015,085 Capital Stock i 19,125,000 Furniture f 2,295,000 Legal Reserve 660,450 Accumulated Depreciation Furniture 446,250 Retained Earnings j 7,905,000 Trademark g 15,300,000 Accumulated amortization MF 2,677,500 Total Equity 27,690. 450 Total Net Fixed Assets 21,886,585 Total Liabilities and Equity 72,705,535 Investments in listed shares 10,200,000 Investments in shares h 7,650,000 Total Other Assets 17,850,000 Total Assets 72,705,535 37
Prof. Lic. Pedro A. Millán Dubén
a) The financial statements of HACEMOS CA (HACECA), at the end of December 2007 are as indicated above:
b) The total values of the ending inventory are identified in the cost of sales.
c) The Land was acquired in March 2006.
d) The Building was acquired in May 2006 to be depreciated in a straight line for four (4) years.
e) Vehicle acquired in February 2007 for Bs. 3,849,900, to be depreciated in 60 months.
f) Furniture acquired in August 2006 for Bs. 1,193,400, was sold in May 2007. In June 2007, Furniture acquired for Bs. 2,295,000 to be depreciated in a straight line in 36 months.
g) “Trademark” was contracted in April 2006 with annual amortization for 10 years.
h) Investments in shares that are not traded on the Stock Exchange have been acquired in July 2006.
i) In February 2007, the Shareholders' Meeting approved an increase in Capital Stock. Said increase was legalized in the Mercantile Registry in April 2007 and, according to the accounting records, the increase in reference was paid in cash in July 2007.
j) The Shareholders' Meeting dated February 2007 decreed dividends, whose cancellation according to the records legal and accounting was carried out in May 2007
k) The accounting records dated April 2007 show credits in accounts payable to related companies for Bs. 6,660,600. Likewise, there are credits in shareholders' accounts receivable for Bs. 306,000 dated November 2007 38
Prof. Lic. Pedro A. Millán Dubén
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