Revenue expenditure and Risk response: Difference between pages

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1. ''Financial reporting.''
A choice in relation to an identified risk which can be categorised broadly as the decision whether to:


Expenditure that is charged against profits in the current financial reporting period, rather than being capitalised.
# Avoid the risk, or
# Accept it.


Sometimes known as ''revenue costs.''


The broad choice to 'accept' a risk can be further classified according to whether the firm then retains, reduces or transfers the risk.


2. ''Tax.'' 
Using this model, the classes of potential risk responses are therefore four, namely:


Expenditure incurred in the course of trade that is treated as an allowable deduction in arriving at taxable profit.
# Avoid
# Accept and retain
# Accept and reduce, or
# Accept and transfer.




== See also ==
==See also==
* [[Capital expenditure]]
* [[Insurance]]
* [[Capitalise]]
* [[Reduce]]
* [[Expenditure]]
* [[Risk assessment]]
* [[Expense]]
* [[Risk evaluation]]
* [[Opex]]
* [[Risk identification]]
* [[Revenue]]
* [[Risk management]]
* [[Risk reporting]]
* [[Transfer]]
* [[Guide to risk management]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Financial_risk_management]]
[[Category:Manage_risks]]

Revision as of 20:35, 9 February 2019

A choice in relation to an identified risk which can be categorised broadly as the decision whether to:

  1. Avoid the risk, or
  2. Accept it.


The broad choice to 'accept' a risk can be further classified according to whether the firm then retains, reduces or transfers the risk.

Using this model, the classes of potential risk responses are therefore four, namely:

  1. Avoid
  2. Accept and retain
  3. Accept and reduce, or
  4. Accept and transfer.


See also