Analysis Of The Difference Between The Accounting And Tax Laws Of Cash Dividends In The Purchase Of Shares (Stock)

There is a controversy about whether there is any difference between the accounting cost and the basis of tax base in the acquisition of equity (stock). The focus of the controversy is whether the cash dividends that have been announced but not yet paid are included in the payment of the share price and the extra expenses of the enterprise.

For this problem, we first sort out the relevant policies in accordance with the provisions of the accounting. As for the accounting treatment of enterprise's purchase of equity (stock), we divide it into two situations: one is the implementation of the enterprise accounting standards, the other is the implementation of the accounting standards for small enterprises.

For enterprises executing the enterprise accounting standards, the shares (stock) purchased by them are generally classified into three categories according to the actual situation, that is, as long-term equity investment accounting, transaction financial assets accounting or accounting for the sale of financial assets. As a long-term equity investment, the company's purchase of shares shall be governed by the Enterprise Accounting Standard No. second - long-term equity investment. If the stocks purchased by an enterprise are counted as trading financial assets or available for sale financial assets, the accounting standards for Enterprises No. twenty-second - confirmation and measurement of financial instruments shall be implemented.

According to the relevant provisions of the accounting standards for Enterprises No. second - long-term equity investment, whether the investment enterprise is a long-term equity investment acquired in cash or in the form of equity securities, the price paid includes the cash dividends declared by the investment entity but not yet issued, or the profit not being taken as the cost of long-term equity investment, which should be treated as a receivable item.

According to the relevant provisions of the accounting standards for Enterprises No. twenty-second - confirmation and measurement of financial instruments, the cash dividends that have been declared but not yet paid by the enterprises in the price paid by the financial assets shall be treated separately as receivable items.

For the enterprises implementing the accounting standards for small enterprises, the shares (stock) they buy are either accounted for as short-term investments or accounted for as long-term equity investments. As a short-term investment accounting, according to the eighth provision of the accounting standards for small enterprises, the short-term investment paid in cash shall be based on the purchase price and the relevant taxes and fees. cost Metrology. The cash dividends that have been declared but not yet paid in the actual payment price shall be separately recognized as dividends receivable and not included in the cost of short-term investments. As a long-term equity investment accounting, according to the twenty-third principles of accounting standards for small enterprises, the long-term equity investment acquired by paying cash should be measured according to the purchase price and related taxes and fees as the cost. The cash dividends that have been declared but not yet paid in the actual payment price shall be separately recognized as dividends receivable and not included in the cost of long-term equity investment.

Through many aspects accounting policy By analyzing, we can draw a conclusion that whether the enterprises that implement the enterprise accounting standards or the enterprises implementing the accounting standards for small enterprises, or whether the shares purchased by the enterprises are accounted for as long-term equity investments, or as financial assets or short-term investment accounting, the cash dividends that have been declared but not yet paid in the prices paid by the enterprises in accounting are treated as receivable items and are not included in the cost of the purchased assets.

As for the confirmation of the tax basis for the purchase of equity (stock), we need to implement it in accordance with the relevant provisions of the enterprise income tax law and its implementation regulations. According to the seventy-first provision of the regulations on the implementation of the enterprise income tax law: the investment assets shall be determined according to the following methods: (1) the investment assets acquired through payment of cash shall be purchased at the cost; and (two) the investment assets acquired by paying outside the cash shall be the fair value of the assets and the related taxes and fees paid as the cost.

According to the provisions of this article, Enterprise income tax law "For the purchase of shares (stock), whether in cash or non cash, the historical cost is used as the measurement principle. However, in the tax law, if the stock (stock) contains the cash dividend declared but not yet paid, there should be no definite provision for the purchase of the equity (stock) link. If it is directly stated in accordance with the seventy-first provision of the regulations on the implementation of the enterprise income tax law, it appears that this part of the cash dividend which has been declared but not yet paid shall be the tax basis for acquiring the equity (stock) of the purchased enterprise. In this way, accounting and tax laws have made differences in handling cash dividends that have been announced but not yet paid.