An Analysis Of The Term Actually Incurred In Section 11(a) Of Income Tax Action Act No 58 Of 1962

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will take place can be measured reliably...

Recognition of expenses:

94. Expenses are recognised in the income statement when a decrease in
future economic benefits related to a decrease in an asset or
an increase of a liability has arisen that can be measured
reliably. This means in effect that recognition of expenses
occurs simultaneously with the recognition of an increase
or a decrease in assets

95. Expenses are recognised in the income statement on the basis
of a direct association between the costs incurred and the and the
earning of specific items of income. This process, commonly
referred to as the matching of costs with revenues, involves the
simultaneous or combined recognition of revenues and expenses that
result directly and jointly from the same transaction or other
events;

The fisc takes little notice of these rules when it ...

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No deductions shall be made in respect of any moneys, claimed
as a deduction from trade, to the extent to which such monies
were not laid out or expended for the purposes of trade.'

This report will focus on the meaning of the term "actually incurred" (as a
critical part of the recognition process) and not on the other requirements. It
will explore the difference between the accounting requirements for expenditure
and liabilities to be recognised, and the requirements for recognition for
Income Tax purposes. It will try to better understand the meaning and
implications of this phrase, with a view to be able to better manage and control
its impact on the ...

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