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Subject: Re: Research and development---info. Author: Steve Bonkers. [ Next Thread | Previous Thread | Next Message | Previous Message ] Date Posted: 07:36:15 02/10/02 Sun In reply to: Steve Bonkers. 's message, "Research and development---info." on 08:21:50 02/03/02 Sun R&D/increase/profits x 7.5 mill. ---------------------------------------------- Another person's analysis of R and D. ---------------------------------------------- Work not my own. ---------------------------------------------- I have been looking through the ATO website and came across this simplified way of calculating R&D. This is the way that R&D tax expenditure affects any companies’ bottom line. In inverted comma’s is from www.ato.gov.au. ----------------------------------------------- Research & Development Tax Concession. “(a) an eligible company incurs research and development expenditure (other than contracted expenditure) during a year of income; and ---------------------------------------------- (b) the aggregate research and development amount in relation to the company in relation to the year of income is greater than $20,000; ---------------------------------------------- the amount of that expenditure multiplied by 1.25 is allowable as a deduction from the assessable income of the company of the year of income.” ----------------------------------------------- I am of the opinion that ERG may have been understating profits over the last few years due to the way R&D tax concession is calculated. In the recent 2001 Annual Review page 16, third last paragraph, Peter Fogarty states that, "In the 2002 year we expect to see R&D reduce significantly as the major phase of development of the Group's MASS technology is completed." ---------------------------------------------- If $40million is ERG’s annual R&D expenditure and it reduces to $10million in 2002, then ERG will increase profits by $7.5million. Not to mention the $30million they have not spent. ---------------------------------------------- Anyone have any further opinions or have a different reference point for calculating R&D tax concessions?Thanks By the way, I hold ERG and am not an accountant, so I could be wrong with the R&D tax concession calculation method. ---------------------------------------------- [ Next Thread | Previous Thread | Next Message | Previous Message ]

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Subject Author Date Re: Research and development---info. Steve Bonkers 13:31:12 03/04/02 Mon