Accounting and Taxation. 18 6.1 Fiscal Year..................................... 18 ----------- 6.2 Maintenance of Books and Records................ 18 -------------------------------- 6.3 Access to Books of Account...................... 18 -------------------------- 6.4 Financial Statements; Tax Matters Partner....... 18 ----------------------------------------- 6.5 Tax Elections.................................... 18 ------------- 6.6 Tax Information.................................. 19 --------------- ARTICLE VII MANAGEMENT...................... 19
Accounting and Taxation. For tax purposes, unpaid losses are valued on a discounted basis rather than a nominal basis. Companies determine the appropriate discount factor by using one of the following: • Company-specific payment patterns and IRS discount rates • IRS payment patterns and IRS discount rates Since discount factor determination differs by company, discounted unpaid claims will also differ by company. This contributes to asymmetrical taxable income results. As an example, assume that the primary insurer from earlier applies a discount factor of 0.875 and the reinsurer applies a discount factor of 0.85. Given a marginal tax rate of 35% for each company, the taxable income results are as follows: • Primary – Achieves taxable income gain of $400 – ($500)(0.875) = -$37.50 and a tax decrease of $37.50(0.35) = $13.13 (all in 000s) • Reinsurer – Achieves taxable income gain of ($550)(0.85) – $400 = $67.50 and a tax increase of $67.50(0.35) = 23.63 (all in 000s) In this example, the income and tax differences are caused by the following: • Differing opinions on the appropriate reserve amounts ($500 vs $550) • Differing opinions on the discount factor (0.875 vs 0.85) Original Mathematical Problems & Solutions MP #1 A mono-line insurer has a quota-share contract with a single reinsurer. Each entity has reported the following experience related to this agreement (before commutation) at the end of 2017: Policy Gross Paid Loss for Primary ($000): Year Year 2015 1200 2400 3000 2015 480 960 1200 2016 1300 2100 2016 520 840 2017 1400 2017 560 12 mo. 24 mo. 36 mo. Policy Gross Paid Loss for Reinsurer ($000): 12 mo. 24 mo. 36 mo. Policy Gross Reserves (Case + XXXX) for Primary ($000): Year Year 2015 2600 2100 1500 2015 1040 840 600 2016 2800 2200 2016 1120 880 2017 2700 2017 1080 12 mo. 24 mo. 36 mo. Policy Gross Reserves (Case + XXXX) for Reinsurer ($000): 12 mo. 24 mo. 36 mo. • A 40% quota-share reinsurance agreement has been in place for all three policy years with the same reinsurer. The reinsurer does not place any additional reserves on top of the primary insurer’s reserves • The insurer’s and reinsurer’s discount factors are 0.875 and 0.85 for all years, respectively • At the end of 2017, the two parties agree to commute the reinsurance contract for policy year 2015 • The insurer’s and reinsurer’s accounting entries are based on the SAP framework
Accounting and Taxation. 5 6.1. Fiscal Year ............................................................................................................. 5 6.2. Taxation ................................................................................................................. 5
Accounting and Taxation. 8.01. Fiscal Year ----------------- The books and records of the JV Company shall be kept on an accrual basis. The fiscal year of the JV Company shall be commenced on December 26 and end on the following December 25 of each year and the accounts shall be settled as of the end of each fiscal year.
Accounting and Taxation. 21 SECTION 8.01 Accrual Basis; Financial Accounting Conventions...............................................21 SECTION 8.02 Maintenance of Books of Account...............................................................21 SECTION 8.03 Financial Statements..........................................................................21 SECTION 8.04 Other Reports and Inspection..................................................................23 SECTION 8.05 Taxation.................................................................................... 23 SECTION 8.06 Deposit of Funds............................................................................ 24 ARTICLE IX. Membership; Disposition of Membership Interests............................................. 24 SECTION 9.01 Restrictions on Transfer of Membership Interests............................................ 24 SECTION 9.02 Admission of New Members.................................................................... 26
Accounting and Taxation. The Company shall not and no Subsidiary shall:
Accounting and Taxation. 3.3.1 That the Audited Balance Sheet and Profit and Loss Account of the Company for the financial period ending thirty-first (31st) December 2005 (hereinafter referred to as “the Audited Accounts” which are being attached to this agreement and marked document ‘C’), (the said date hereinafter referred to as “the Accounts Dates”) are true and accurate in all respects and correctly set out the Company’s assets and liabilities and its financial status.
Accounting and Taxation. (A) Neither Adatom nor HealthCore shall nor shall they permit either of their respective Affiliates to, take or cause to be taken any action, whether before or after the Effective Time, that would disqualify the Merger as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1989, as amended (the "Code"). Each of Adatom and HealthCore agrees to use its reasonable best efforts to cure any impediment to the qualification of the Merger as a "reorganization" within the meaning of Section 368(a) of the Code.
Accounting and Taxation. 5.1 Fiscal Year 14 5.2 Location of Records 14 5.3 Books of Account 14 5.4 Annual Financial Statements and Tax Information 14 5.5 Taxation 15 5.6 Governmental Reports 16 5.7 Inspection of Facilities and Records 16 5.8 Deposit and Withdrawal of Funds 16 Page
Accounting and Taxation. EXECUTION VERSION
