Personal expenses?

Canada Discussion in 'General Accountancy Discussion' started by bblegend, Feb 2, 2019.

  1. bblegend

    bblegend

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    Would there be a journal entry for a company paying the property tax for the personal residence of its majority shareholder or would this be violating the separate entity assumption? If no then what accounts would be affected?
     
    bblegend, Feb 2, 2019
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  2. bblegend

    Fidget VIP Member

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    A company can pay whatever to whoever it wants unless there's any legalities in your jurisdiction that specifically prevent it. It's unlikely to be an allowable expense for tax purposes though.
     
    Fidget, Feb 3, 2019
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  3. bblegend

    MarekMuc

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    Agreed with Fidget. In my opinion this is also a related party transaction that needs to be disclosed under IAS 24 (IAS 24 par 21j)
     
    MarekMuc, Feb 5, 2019
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