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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People are Talking

  • “Our Group operates worldwide in the fashion and luxury goods sector and is active in the design, production and distribution of a wide range of products that includes prêt-a-porter, footwear and leather goods.

    We started our collaboration with Nagamine & Mishima Accounting Office since we decided to establish our subsidiary Aeffe Japan in November 2008. N&M supported us during the start up of this company in particular with the accounting, payroll, cash management and tax services and gave their total collaboration when Aeffe Japan built-up Its own financial department. We found a very high quality support and punctual answers to different one-shot questions that also helped us to understand, in an easy way, a really different way to operate.

    After the start up phase, we decided to confirm to N&M the tax and payroll services for Aeffe Japan and for Moschino Japan, our other Japanese subsidiary, and the daily relationship with them passed from the Italian HQ to the Japan subsidiaries in a very simple way.

    We are very satisfied to have chosen N&M.”

    Andrea Pagliarani, Group Financial Controller

    Aeffe Japan KK