22/11/2008

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TIFD guide   Multiple Lines of Business The following example represents the statements of a company whose main activity is the operation of a retail outlet bu also runs a video rental shop. The following is an abridged Income statement and a statement of retained earnings: ABC Limited Profit and Loss Account fot the year ended 31 December 2001   Notes Lm Trunover 1 388,378 Cost of Sales   322,471 Gross Profit   65,907 Other Income 2 4,898     70,805 Operating Expenses   35,689 Net Profit before Tax 3 35,116 Taxation 4 (11,847) Net Profit after Tax   23,269   Statement of Retained Earnings Balance 1 January 2001 23,418 Profit for the year 23,269 Dividends Proposed (6,500) Balance 31 December 2001 40,187   Notes 1 Turnover represents the invoiced value of goods sold and services rendered 2 Other Income Lm   Net income from video rentals [see attached schedule] 3,578   Investment income 1,320 3 The profit on Ordinary activities before tax is stated after charging Wages   Social Security Cost 13,724   Depreciation 6,037   Auditors` Renumeration 450   Directors` Renumeration 2,000 4 Taxation     Malta Income Tax 13,264   Deferred Taxation (1,417)   The company attaches detailed income statements for each of its activities.   Detailed Profit and Loss Account for the year ended 31 December 2001   Lm Lm Sales   388,378 Opening Stock 137,429   Purchases 291,635   Closing Stock (106,593)   Cost of sales   322,471 Gross margin   65,907 Net income from video shop [Statement 2] 3,578 Investment Income   1,320 Operating Expenditure     Advertising and promotion 1,438   Wages and Salaries 9,768   Directors' fees 2,000   Employer's share of SSC 910   Staff Welfare 156   General office expenses 184   Accountancy fees 250   Audit fees 450   Licences and permits 159   Motor Vehicles expenses 2,874   Company registration fee 50   Repairs and maintenance 1,197   Water and Electricity 644   Telephone and telecommunications 769   Garbage removal 274   Overdraft Interest 1,498   Bank Loan Interest 7,079   Depreciation of motor vehicles 653   Depreciation of Lifts 1,932   Depreciation of Air-conditioners 891   Depreciation of delivery vans 1,342   Depreciation of electronic equipment 296   Depreciation of furniture and fixtures 875   Total operating expenditure   35,689 Net Profit before tax   35,116 Tax Provision for the year   (11,847) Net Profit after tax   23,269   Statement of Retained Earnings Lm   Balance 1 January 2001 23,418 Profit for the year 23,269 Dividends Proposed (6,500) Balance 31 December 2001 40,187   Statement 2 Video Shop - Profit and Loss Account for the year ended 31 December 2001   Lm Lm Film rentals (Gross)   8,670 Shop running expenditure Wages-Regular 3,956   SS Contributions 368   Licences 91   Repairs and maintenance 166   General shop expense 189   Water and Electricity 95   Telephone and telecommunications 179   Depreciation of Air-conditioners 48   Total Shop Expenditure   5,092 Net income   3,578   In this example statement 1 [the main income statement] includes the net income figure that results in statement 2 [the supplementary statement]. When you report using the TIFD, the main income statement should not include the net income figure reported in the supplementary statement. In this example the net income from video rentals has to be excluded from the main income statement and included in the supplementary statement only. As a result, some total lines and perhaps gross profit will be different from that shown in the financial statements. However, the resulting net income figure before and after tax should be the same. You can report the same TIFD items in both statements. However, any amounts you report for an item in the supplementary statement should not be included in the main income statement. The next part shows how this same information is reported using the TIFD and how to balance the financial information. Please note that the IRD will only receive the name of the operating establishment, description of the operation and the sequence number along with the TIFD code and amount. Main Income Statement 4500 NAME OF THE OPERATING ESTABLISHMENT xxx superM Marketing 4501 OPERATION DESCRIPTION Supermarket 4502 ACTIVITY NUMBER 1 5003 Retail Sales 388,378 5101 Interest from Maltese banks 1,320 5499 TOTAL REVENUE 389,698 5503 Opening Stock of Finished Goods 137,429 5553 Imports of Finished Goods 152,374 5555 Local Purchases of Finished Goods 139,261 5703 Closing Stock of Finished Goods (106,593) 5998 COST OF SALES 322,471 5999 Gross Profit / Loss 67,227 6000 Advertising and promotion 1,438 6020 Wages, Salaries and Employee benefits 9,768 6026 Directors' fees 2,000 6028 Employer's share of Social Security Contributions 910 6034 Staff Welfare 156 6140 Office expenses 184 6172 Accountancy fees 250 6173 Audit fees 450 6200 Licences, permits and membership 159 6203 Company registration fee 50 6250 Repairs and maintenance 1,197 6311 Water and Electricity 644 6313 Telephone and telecommunications 769 6314 Garbage removal 274 6342 Overdraft Interest 1,498 6343 Bank Loan Interest 7,079 6431 Depreciation of motor vehicles 653 6439 Depreciation of Lifts and Escalators 1,932 6440 Depreciation of Air-conditioners 891 6447 Depreciation of commercial vehicles 1,342 6448 Depreciation of computers and electronic equipment 296 6450 Depreciation of furniture, fixtures, fittings and soft furnishings 875 6611 Motor Vehicles Running Costs 2,874 6997 TOTAL OPERATING EXPENSES 35,689 7050 NET INCOME / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAX 31,538   Supplementary Income Statement 4500 NAME OF THE OPERATING ESTABLISHMENT xxx Vision 4501 PERATION DESCRIPTION Video Rentals 4502 ACTIVITY NUMBER 2 5203 Film rental 8,670 5499 TOTAL REVENUE 8,670 5998 COST OF SALES 0 5999 Gross Profit / (Loss) 8,670 6021 Wages - Regular 3,956 6028 Employer's share of Social Security Contributions 368 6200 Licences, permits and membership 91 6250 Repairs and maintenance 166 6292 Shop expense 189 6311 Water and Electricity 95 6313 Telephone and telecommunications 179 6440 Depreciation of Air-conditioners 48 6997 TOTAL OPERATING EXPENSES 5,092 7050 NET INCOME / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAX 3,578 Note the inclusion of the same TIFD codes, including the mandatory fields, in both statements. 5499 TOTAL REVENUE 5998 COST OF SALES 5999 Gross Profit / (Loss) 6028 Employer's share of Social Security Contributions 6200 Licences, permits and membership 6250 Repairs and maintenance 6311 Water and Electricity 6313 Telephone and telecommunications 6440 Depreciation of Air-conditioners 6997 TOTAL OPERATING EXPENSES 7050 NET INCOME / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAX   Summary Income Statement 7050 NET INCOME / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAX 35,116 7060 Current tax provision (13,264) 7080 Deferred tax provision 1,417 7500 NET INCOME / (LOSS) FOR THE PERIOD 23,269 7501 Retained earnings brought forward 23,418 7502 Dividends proposed during the year (6,500) 7600 RETAINED EARNINGS CARRIED FORWARD 40,187 The summary statement links the two statements together. The resulting amount in item 7050 in the main and supplementary statements is added up and reported in the summary income statement. [35116 = 3578 + 31538]

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