Nagamine & Mishima Accounting Office

Accounting practice since 1989

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Accrued Expense

Accrued Expense

As noted in Accounts Payables, tax deductibles for corporate income are recognized on an accrual basis not cash basis. Therefore, when you are recognizing in a cash basis, you need to accrue at the end of the year or simply make accrual adjustments when calculating taxable income for filing tax returns.

For below expenses, even if you have not made payments, you are able to claim as tax deductible based on accruals.

1. Rent
2. Interests
3. Leasing expenses

Depending on your business characteristics, there may be other items you may claim as tax deductibles, so consult with your tax accountant at the time of closing. Besides recognizing tax deductibles as accruals, you are able to recognize deductibles on a cash basis under certain conditions. This is when you make payments for expenses extending for more than a month, be sure to check what is best for the company with the accounting office.

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  • “Nagamine Mishima has been our service provider since our expansion into the Japanese market. They have provided valuable solutions and much needed flexibility for our business.  From junior staff support to managerial support, Nagamine Mishima has provided the support that enabled us to hit the ground running without the complication of having to hire an internal accounting department in Japan.”

    Kevin Yu, Asia Pacific

    Tesla Motors