8.)Gamma Holding NV, a Dutch textile company, provided the foll owing inf note t
ID: 2475687 • Letter: 8
Question
8.)Gamma Holding NV, a Dutch textile company, provided the foll owing inf note that" tion in its consolidated income statement for the year 2009 (note thto equivalent to "income") x 1,000,000 Group result before taxation . Income tax Net group result from continuing operations . . …····.. . 2009 2008 (45.8) 341) (4.6) (504) B42 . . . . . . . . . . Notes to the financial statements provided the following information related to provisions recognized in 2008 and 2009: € × 1,000,000 19 Other provisions The composition and changes were as follows: Balance at 31-12-2007 Changes in 2008 Additions charged to the income statement.... Restructuring Other Total 6.4 179 1.7 28 2.6) (139 11.5 27.0 Payments Transfer to liabilities directly related to discontinued operations (04 (04) Balance at 31-12-2008 5 5.1 308Explanation / Answer
a)Income before Tax taxation
=Past year(2008)-Current year(2009) / Past year(2008) *100
=34.1 - 45.8 /34.1 *100
=11.7/34.1 *100
=0.3431*100
=34.31%
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b)Provision is one of the part of profit, Company or organization kept aside Provision for meeting future laibilities, It will calculated before income tax.
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C)In this case, addition charge to the income statement has decreased from 28.7(2008) to 13.7(2009), this is a main reason cause ending balance in provision to change from one year to another year.
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D)If there no changes in provision ending balances, it get impact on 2009 and 2010, not on 2008 and 2009
2008 ending balances reflected in 2009, same 2009 ending balance will reflected in 2010 not in 2009.
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