Accumulated depreciation is the total loss of value of a business asset over time due to wear and tear. It is different from depreciation expense and can be calculated by adding up the annual depreciation amounts. Different methods of depreciation can be used, such as the straight-line method or the declining balance method. Accumulated depreciation […]
The accumulated earnings tax is an additional corporate tax paid by companies that choose to withhold earnings instead of paying dividends. It is calculated in addition to normal corporate income taxes and aims to encourage companies to pay dividends while providing the government with more tax revenue. The tax may discourage reinvesting earnings in the […]
Governments tax corporate income twice, through corporate income tax and individual tax on dividends. Companies may withhold profits to avoid double taxation, but governments combat this with a tax on accumulated profits. The tax comes into effect when a company has excess liquidity without justification, and the threshold and tax rates vary by jurisdiction. Companies […]
