Measurement of Income Tax on Period Profit - Either Fiscal Accounts or Otherwise, Both Exact and Simple

34 Pages Posted: 27 Aug 2003 Last revised: 10 Jun 2016

Date Written: July 15, 2003


Measurement of income tax on period profit, both tax to be paid (resulting from the fiscal accounts) and the one and only real tax burden in the internal documents (management accounting) as well as the tax costs in the published accounts (financial accounting), can all be calculated by means of The Profit Formula(R), quickly and easily. Also special items, for instance tax-free revenues and losses that are not fiscally acknowledged, can easily be processed. Anybody can measure any reasonable period profit with The Profit Formula(R). Counting and calculating is absolutely minimal and exceptionally simple via a direct way to the solution. Short and easy. A tremendous amount of money can be saved with regard to administration and fringe costs, also in case of pure nominalism (HC-accounting). The budgets of many accounts departments can be cut drastically.

Direct mutations in the share capital are out of the question. The unity between balance sheet and profit and loss account cannot be disaggregated, of course concerning a specific business and exclusive capital withdrawals and likewise payments. Balance sheets, profit and loss account, statement of source and use of funds relate to the very same money units during a certain period of time but viewed from different angles. They cannot miss one single money unit. Both the balance sheets at the beginning and end of the period under consideration and the profit and loss account, have to go hand in hand and fit together.

Keywords: Income measurement, Income tax, Fiscal accounts, Real tax burden, Tax to be paid, Direct mutations in the share capital, Profit to be published, Correctly handle a convertible, Provisions for latent tax, US-GAAP, The new IASB rules, The UK debate on inflation accounting in the 1970s, Verified intern

JEL Classification: M4

Suggested Citation

Jacobs, Jan F., Measurement of Income Tax on Period Profit - Either Fiscal Accounts or Otherwise, Both Exact and Simple (July 15, 2003). Available at SSRN: or

Jan F. Jacobs (Contact Author)

Independent ( email )

Beethovenlaan 36
Enschede, Overijssel 7522 HJ

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