Assets loss of equity investment should be deducted according to the actual occurrence

The State Administration of taxation recently issued the "Enterprise asset loss before tax deduction management measures."　　The scheme has been implemented since January 1, 2008. The approach states that assets owned or controlled by the enterprise for the operation and management activities and related to the acquisition of taxable income, including currency assets such as cash, bank deposits, receivables and prepayments (including receivables), inventories, fixed assets, construction projects, productive biological assets, etc. non-monetary assets,　　and creditor's rights investment and equity (equity) investment, the loss of assets, should be in accordance with the actual tax provisions or actual occurrence of the year declaration deduction, no advance or deferred deduction. For various reasons, the loss of assets can not be accurately calculated in the year and the scheduled deduction, after the approval of the tax authorities, may be retroactive confirmation of the loss occurred in the annual tax deduction, and accordingly adjust the asset loss of the year of income tax payable.　　The amount of tax that is calculated after adjustment shall be refunded in accordance with the relevant provisions, or the tax payable for the current period of the enterprise shall be satisfied. If the financial enterprise meets the bad debt condition the bank card Overdraft fund and the related other receivables which have been counted into the taxable income, shall determine the loss according to the relevant evidence. When there is conclusive evidence that the asset loss has been formed, the assets loss should be confirmed after deducting the liability person and the insurance indemnity, the variable price income or the recoverable amount. The recoverable amount is tentatively 5% of the book balance. (Zhu Baochen)