What Is Financial Distress? Financial distress is a condition in which a company cannot generate revenue or income because it is unable to meet or cannot pay its financial obligations. This is generally due to high fixed costs, illiquid assets, or revenues sensitive to economic downturns. Ignoring the signs of financial distress can be devastating…
At PATC, we define corporate governance as the system of rules, practices and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company’s many stakeholders, such as shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining a…
PATC defines company records as any documents, accounts, books, writing, records or other information that a company is required to keep in terms of the Companies Act 71 of 2008, or any other public regulations. The Companies Act states in Section 24 that records should be retained in writing or in a form that can…
Understanding How These Roles Differ & Relate Keep reading PATC’s blog and discover the differences and overlap between the duties of your accounting officer, auditor & reviewers. Duties of an Accounting Officer
Who Should Register for VAT? Any person that carries on business may register for VAT. You can register once for all different tax types using the client information system. The term person is not only limited to companies but also includes, amongst others, individuals, partnerships, trust funds, foreign donor-funded projects and municipalities. In order to…
Revenue Measurement of Revenue Revenue should be measured at the fair value of the consideration received or receivable. An exchange for goods or services of a similar nature and value is not regarded as a transaction that generates revenue. However, exchanges for dissimilar items are regarded as generating revenue.
Classification of Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incident to ownership. All other leases are classified as operating leases. Classification is made at the inception of the lease.
What is Estate Duty? Estate Duty is payable on the estate of every person who dies and whose nett estate is in excess of R3.5 million. It is charged at the rate of 20%. Estate duty is levied on the property of residents and South African property of nonresidents less allowable deductions. The duty is…
Liquidation is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they come due. As company operations end, the remaining assets are used to pay creditors and shareholders, based on…
Capital Expenditure (CAPEX) Capital expenditure, or CapEx, are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. It is often used to undertake new projects or investments by the firm. This type of outlay is also made by companies to maintain or increase the scope of…
