Will inflation adjustment be made to the affiliate account numbered 242?
Since accounts 240, 242 and 245 are considered non-monetary assets, inflation adjustment will be made.
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For shares purchased in return for cash capital; the payment date, for shares purchased in return for in-kind capital; the date on which the ownership of the assets contributed as capital is transferred, for shares purchased in return for dividends; the registration date of the capital of the company in which the participation is made will be taken as the basis date for inflation adjustment.
Shares are essentially a non-monetary economic asset and the adjustment process will be carried out by multiplying them with the adjustment/carryover coefficient.
However, it has been deemed appropriate to adjust the foreign currency denominated shares, participations and advances in the assets of the enterprises with the exchange rate on the adjustment date, based on the authority granted by subparagraph (8) of paragraph (A) of Article 298 of Law No. 213.
Merger premium (Positive or negative differences arising from tax-free takeover of institutions with which partnership is established)
ARTICLE 25- (1) In the section titled “19.1. Transfer” of the General Communiqué on the Corporate Tax Law No. 1, it is stated that if the capital increase to be made by an institution due to the takeover of another institution in which it has a subsidiary or in which it has a subsidiary is realized as a whole, which is less than the amount corresponding to the said subsidiary shares, this will not constitute a violation of the conditions specified in the first paragraph of Article 19 of the Corporate Tax Law; if the value in the subsidiary account is not equal to the nominal value of the subsidiary shares, the positive or negative difference between them can be monitored in temporary accounts without being related to the determination of the taxable income of the institution, and it will also be possible to terminate these temporary accounts in the institution records without being related to the determination of the taxable income of the institution.
Within this framework, the merger premium, which is not an active or passive item according to the tax laws; It is a temporary account that balances active and passive, and this feature will not change no matter which account it is monitored in. Therefore, the merger premium arising from the transfer transactions made within the scope of the first paragraph of Article 19 of the Corporate Tax Law should not be taken into account in the inflation adjustment.
Source: Istanbul Chamber of Certified Public Accountants
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