Accounting and Taxation. 18 6.1 Fiscal Year..................................... 18 ----------- 6.2 Maintenance of Books and Records................ 18 -------------------------------- 6.3 Access to Books of Account...................... 18 -------------------------- 6.4 Financial Statements; Tax Matters Partner...
Accounting and Taxation. For tax purposes, unpaid losses are valued on a discounted basis rather than a nominal basis. Companies determine the appropriate discount factor by using one of the following: • Company-specific payment patterns and IRS discount rates • IRS payment patterns and IRS discount rates Since discount factor determination differs by company, discounted unpaid claims will also differ by company. This contributes to asymmetrical taxable income results. As an example, assume that the primary insurer from earlier applies a discount factor of 0.875 and the reinsurer applies a discount factor of 0.85. Given a marginal tax rate of 35% for each company, the taxable income results are as follows: • Primary – Achieves taxable income gain of $400 – ($500)(0.875) = -$37.50 and a tax decrease of $37.50(0.35) = $13.13 (all in 000s) • Reinsurer – Achieves taxable income gain of ($550)(0.85) – $400 = $67.50 and a tax increase of $67.50(0.35) = 23.63 (all in 000s) In this example, the income and tax differences are caused by the following: • Differing opinions on the appropriate reserve amounts ($500 vs $550) • Differing opinions on the discount factor (0.875 vs 0.85) A mono-line insurer has a quota-share contract with a single reinsurer. Each entity has reported the following experience related to this agreement (before commutation) at the end of 2017: Policy 2015 1200 2400 3000 2015 480 960 1200 2016 1300 2100 2016 520 840 2017 1400 2017 560 12 mo. 24 mo. 36 mo. Policy Policy 2015 2600 2100 1500 2015 1040 840 600 2016 2800 2200 2016 1120 880 2017 2700 2017 1080 12 mo. 24 mo. 36 mo. Policy • A 40% quota-share reinsurance agreement has been in place for all three policy years with the same reinsurer. The reinsurer does not place any additional reserves on top of the primary insurer’s reserves • The insurer’s and reinsurer’s discount factors are 0.875 and 0.85 for all years, respectively • At the end of 2017, the two parties agree to commute the reinsurance contract for policy year 2015 • The insurer’s and reinsurer’s accounting entries are based on the SAP framework
a) Assuming the commutation price is $500,000, construct tables of gross, ceded, and net ultimate losses for the primary insurer after accounting for the commutation.
b) Identify an unusual entry in the triangles constructed in part a. caused by the commutation.
c) Provide one reason why the discount factors might differ between the primary insurer and the reinsurer.
d) Calculate the changes in taxable income for the...
Accounting and Taxation. (A) Neither Adatom nor HealthCore shall nor shall they permit either of their respective Affiliates to, take or cause to be taken any action, whether before or after the Effective Time, that would disqualify the Merger as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1989, as amended (the "Code"). Each of Adatom and HealthCore agrees to use its reasonable best efforts to cure any impediment to the qualification of the Merger as a "reorganization" within the meaning of Section 368(a) of the Code.
(B) Adatom shall instruct its accountants to deliver and shall use its reasonable best efforts to cause such accountants to deliver to HealthCore letters dated as of the Closing Date, addressed to HealthCore, containing such matters as are customarily contained in auditors' letters regarding information about Adatom included in the Proxy/Registration Statement, which auditors' letters shall be in form and substance reasonably satisfactory to HealthCore.
(C) All Returns required to be filed by or with respect to each party (or any of them) after the date hereof and on or before the Effective Time shall be prepared and timely filed, in a manner consistent with prior years and applicable laws and regulations other than such Returns for which the failure to file would not have a Material Adverse Effect with respect to such party.
Accounting and Taxation. 21 SECTION 8.01 Accrual Basis; Financial Accounting Conventions...............................................21 SECTION 8.02 Maintenance of Books of Account...............................................................21 SECTION 8.03 Financial Statements..........................................................................21 SECTION 8.04 Other Reports and Inspection..................................................................23 SECTION 8.05 Taxation.................................................................................... 23 SECTION 8.06 Deposit of Funds............................................................................ 24 ARTICLE IX. Membership; Disposition of Membership Interests............................................. 24 SECTION 9.01 Restrictions on Transfer of Membership Interests............................................ 24 SECTION 9.02 Admission of New Members.................................................................... 26
Accounting and Taxation. 3.3.1 That the Audited Balance Sheet and Profit and Loss Account of the Company for the financial period ending thirty-first (31st) December 2005 (hereinafter referred to as “the Audited Accounts” which are being attached to this agreement and marked document ‘C’), (the said date hereinafter referred to as “the Accounts Dates”) are true and accurate in all respects and correctly set out the Company’s assets and liabilities and its financial status.
3.3.2 That as of the Accounts Dates the Audited Accounts make full provision or reserve for all taxation which is liable to be or could be assessed on the Company, or for which it may be accountable in respect of the period ended as at that date. The Company is under no liability to pay any tax, penalty or interest in connection with any claim for tax. Should the Company have any contingent liability in respect of tax in dispute up to the date of this share transfer, such is to be borne by the Vendor.
3.3.3 That all returns, computations and payments which should be, or should have been made by the Company for any taxation purposes have been made within the required period and are up to date, correct and on a proper basis and none of them is the subject of any dispute with the Inland Revenue Department or other taxation authorities.
3.3.4 That the Company has deducted, accounted for and paid all amounts which it has been obliged to deduct and pay in respect of taxation and, in particular has properly operated the FSS system, by deducting tax as required by law, from all payments made, or treated as made, to its employees, dependents or former employees, and accounted to the Inland Revenue for all tax so deducted and for all tax chargeable on benefits provided for its employees, dependents or former employees.
3.3.5 That the Company has deducted, accounted for and paid to the Inland Revenue Department, all amounts which it has been obliged to deduct in respect of national insurance contributions of its employees and dependents.
3.3.6 That the Company has duly complied in all respects with the Value Added Tax and has made correct and up-to-date records, invoices and other documents appropriate for such legislation. The Company is not in arrears with any payments or returns thereunder or liable to any payment or penalty.
3.3.7 That the Company has good and indefeasible title to all of its properties, inventory, interests in properties, and assets, both real and personal, which are reflected in the Audited Balance S...
Accounting and Taxation. 5 6.1. Fiscal Year ............................................................................................................. 5 6.2. Taxation ................................................................................................................. 5
Accounting and Taxation. 5.1 Fiscal Year 14 5.2 Location of Records 14 5.3 Books of Account 14 5.4 Annual Financial Statements and Tax Information 14 5.5 Taxation 15 5.6 Governmental Reports 16 5.7 Inspection of Facilities and Records 16 5.8 Deposit and Withdrawal of Funds 16
Accounting and Taxation. 8.01. Fiscal Year ----------------- The books and records of the JV Company shall be kept on an accrual basis. The fiscal year of the JV Company shall be commenced on December 26 and end on the following December 25 of each year and the accounts shall be settled as of the end of each fiscal year.
Accounting and Taxation. EXECUTION VERSION
Accounting and Taxation. Location of Records..................................................................
